Tax on Compensation, Dealings in Properties and Corporation

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I.
On 30 January 2019, Jayshan Kinston sold his 800 shares of stock not traded in PSE (held as capital asset,
acquired at a cost of P80,000.00) from TabaChing, Inc., a domestic corporation, to Will I Am at P200 per
share. The FMV of the shares that time is P180/share.
On 19 May 2019, Jayshan Kinston sold his 500 shares not traded in PSE (held as capital asset, acquired at
a cost of P200,000.00) from Michelin, Inc., a domestic corporation, to Guz Mac at P300 per share. The
FMV of the shares that time is P280/share.
On 8 August 2019, Jayshan Kinston sold his 600 shares not traded in PSE (held as capital asset, acquired
at a cost of P150,000.00) from Porkchop, Inc. a domestic corporation, to Paulina Fulgenes at P400 per
share. The FMV of the shares that time is P380/share.

At the end of the year, how much is the Annual CGT Payable/Refundable?

II.
On 01 January 2018, May Lopa sold her 1 he. lot held as capital asset, located at Taysan Batangas
(acquired at a cost of P3,000,000 on May 19, 2010) to Allan Lopa at P5,000,000. The Zonal Value
assessed by the BIR is P5,500,000 while the Provincial Assessor assessed it at P4,800,000. Allan assumed
a P3,100,000 mortgage on the lot purchased. Allan made a down payment of P300,000 on January 1,
2018. They agreed that the balance shall be paid in 2 equal yearly installments starting 2019.

1. Can May Lopa pay the CGT in installment?

2. How much is the CGT due in 2018, 2019 and 2020?
3. Assuming Allan made a P1,300,000 down payment, how will May Lopa pay the CGT and how much?

III.
In addition to his business as RTW retailer, Mr. Dominguez had the following capital assets transaction in
2019:
Capital Assets Sold Acquired Selling Capital
Expenses Gain (Loss)
Date Selling Price Date Cost

Car 03/15/19 310,000 02/16/18 950,000 2,800 (642,800)

Jewelry 04/17/19 450,000 01/12/19 230,000 0 220,000
Painting 07/25/19 900,000 06/15/17 220,000 30,000 650,000
Furniture 09/14/19 120,000 05/12/19 135,000 0 (15,000)
Van 11/11/19 850,000 8/11/19 980,000 1,500 (131,500)

The net capital gain (loss) of Mr. Dominguez is:

 Tax on Compensation, Dealings in Properties and Corporation

IV.

Telletubbies & Co., a partnership engaged in the practice of accounting, had a gross income of 500,000
and expenses of 200,000 during the year 2020:
Chio Pau
Share in P/L ration 75% 25%
Income from other business 800,000 600,000
Expenses 150,000 100,000
Status Married Unmarried
Dependent children none 2
1. What is the income tax payable of the partnership?
2. What is the taxable income of Chio and Pau?
3. How much is the income tax payable/(refundable) of Chio and Pau?
4. Assuming, Telletubbies & Co. is a general partnership, what are the tax implications and how
much tax should Chio and Pau pay all in all??

V.

The following data pertains to a domestic corporation which was incorporated in 2014 but was registered
with the BIR on 2015:
2018 2019 2020 2021 2022 2023

Gross Income 2,000,000 2,800,000 3,200,000 4,600,000 5,000,000 5,500,000

Allowable 1,800,000 2,700,000 3,300,000 4,800,000 4,300,000 5,000,000
Deduction

What is the income tax due in 2021, 2022, & 2023?

VI.

Masikap Corporation, a domestic corporation, has the following information regarding its income and
expenses for the taxable year 2018, which is in its 7th year of business operation:
First Second Third Fourth
Normal Tax P1,000,000 P1,200,000 P2,200,000 P3,100,000
MCIT 600,000 1,300,000 1,920,000 2,680,000
CWT 320,000 480,000 704,000 896,000
*Excess MCIT from previous year = P50,000

Assume that the amounts are cumulative from first quarter to the fourth quarter, what is the income tax
still due in the fourth quarter?

VII.
 Tax on Compensation, Dealings in Properties and Corporation

Willdeym, a resident citizen, has the following income for the year 2019:
Gross income from business of poultry (net of Cost of Sale: 200,000)..... P1,800,000
Gross income from business of piggery (net of Cost of Sale: 100,000)...... 800,000
Dividend from domestic corporation...................................................... 10,000
Dividend from resident corporation...................................................... 50,000
Interest on bank deposit……… ………………………........................... 15,000
Monetary benefit from Deposit Substitute .............................................. 25,000
Sale of common shares held as capital asset from SMART, Inc, not
listed and traded thru Philippine Stock exchange:
Fair Market Value P 1,000,000
Selling Price 500,000
Acquisition Cost 200,000
Sale of common shares held as capital asset from
GLOBE, Inc, listed and traded thru Philippine
Stock exchange:
Fair Market Value P 2,000,000
Selling Price 1,000,000
Acquisition Cost 200,000
Sale of real property not used in trade or business
located in Tondo, Manila:
Assessed Value P 5,000,000
Zonal Value 6,000,000
Selling Price 4,000,000
Acquisition Cost 7,000,000
Sale of real property not used in trade or business
located in Kazakhstan:
Assessed Value P 500,000
Zonal Value 600,000
Selling Price 400,000
Acquisition Cost 350,000
Interest under Expanded Foreign Currency Deposit System 500,000
Won 1st prize: Montero Sport, in a raffle draw worth 3,000,000
Won winnings from Barangay Basketball League 11,000
Won winnings from Barangay Volleyball League 10,000
Interest from P1,000,000 individual trust funds
(Term: 5 years)......................................................................... 100,000
Royalties from cinematographic films………......................... 50,000
Interest from P3,000,000 investment management accounts
(Term: 5 years) After one year and one month, he pre-
terminated the investment account..................... 200,000
Business expenses from poultry business................................... 720,000
Business expenses from piggery business................................... 900,000
An amount paid out for betterments made to increase
the value of the land.................................................................... 80,000
Amount paid in restoring the real property located in
Tondo, Manila ............................................................................ 120,000
 Tax on Compensation, Dealings in Properties and Corporation

1. Assuming Willdeym signified in his first quarter return his intention to avail of the 8%
preferential tax rate, how much is his income tax due for the year 2019?
2. Assuming Willdeym is also employed in Meralco earning a total compensation income per
annum of P1,500,000, how much is his total income tax due?
3. Assuming Wildeym, a mixed income earner where he also earned a total compensation income of
P1,500,000, net of exclusions, signified in his first quarter return his intention to avail of the
OSD, how much is his income tax due?
4. Using all the facts above, however, Wildeym, who earned purely from his businesses of poultry
and piggery a total gross sales of P1,600,000 and P1,300,000, respectively, and incurred cost of
sales for each of P200,000 and P 300,000 for 2019, respectively, signified in his first quarter
return his intention to avail of the 8% preferential tax rate, how much is his total income tax due?
5. Using all the facts above, however, instead of the poultry and piggery businesses, Wildeym has
the business of cockpits and cabarets where these earned a total gross sales of P1,600,000 and
P1000,000, respectively, can he avail the 8% preferential tax rate?

VIII.

The Aidsiah, Inc., a domestic corporation, had the following data for the taxable year 2020:

Sales P5,000,000
Cost of Goods Sold 2,000,000
General, Selling and Administrative Expenses 500,000
Interest Income/yield from trust funds 100,000
Rental Income (net of 5% withholding tax) 190,000
Dividend Income: From domestic corporation 60,000
From foreign corporation 50,000
Winnings from charity sweepstakes 1,000,000
Capital gains from sale of domestic share of stocks not traded in the PSE, sold 75,000
directly to buyer
Dividend declared and paid during the year 500,000
Retained earnings, beg. of the year (subjected to IAE tax last year) 1,000,000
Paid-up Capital, inclusive of Share Premium amounting to P300,000 800,000
Note: The board of directors approved a resolution reserving P1,500,000 of its net profit for the year
for plant expansion.

How much is the Improperly Accumulated Earnings Tax?

 Tax on Compensation, Dealings in Properties and Corporation

IX.

Ping Guerrero, single, living and working in Metro Manila, provides the following data in 2020:

Salary as a Senior Associate in SGV for the year P120, 000

Overtime pay 20, 000
Hazard pay 30, 000
Holiday pay 10, 000
Night Shift Differential Pay 15, 000
13th month pay 10, 000
Rice Subsidy for 1 year 26, 000
Christmas bonus 15, 000
Laundry Allowance 7, 000
Productive Incentive Pay 15, 000
Employee Achievement Award (in cash) 25, 000
Actual Medical Benefits 6, 000

Professional income as a CPA outside his employment 350, 000

Professional expenses 50, 000
PCSO Lotto Winnings 5,000,000
Distributable Share from General Partnership 600, 000
Winnings from playing Tong-its 50, 000
Rental Income from his Condominium unit 1,000,000

Business of Ping-Guer licking Good Fastfood chain:

Sales P2, 000,000
Cost of Sales 1, 150,000
Operating expenses 560, 000
Interest income from BDO 10, 000
Interest Expense 20, 000
Other transactions:
Sale of office equipment held for 5 years:
Selling price 100, 000
Cost 120, 000
Accumulated depreciation 80, 000
Sale of family van-bus held for 3 years:
Selling price 300, 000
Cost 210, 000
Sale of family car held for 18 months:
Selling price 480, 000
Cost 500, 000

Assuming the Minimum Monthly Wage Rate in Metro Manila is P11,000.00.

How much is the Income Tax Payable of Ping Guerrero, if any?

 Tax on Compensation, Dealings in Properties and Corporation

X.

Xander Ford Corp. owns a condominium unit. During the year 2019, the said corporation furnished and
granted the said property for the residential use of Xandarra Park, its Assistant Vice President. The zonal
value of the property per BIR amounts to P10,000,000 while its fair market value as shown in its current
Real Property Declaration amounts to P8,000,000. An independent appraiser has assessed it at
11,000,000.
Compute the fringe benefit tax, if any.

XI.

In April 1, 2019, Pinaloan, Inc. lends money to Allan Ferrya, its Head Manager, amounting to P500,000
without interest so long as he will return the money when his means permit him to do so.
How much is the fringe benefit tax, if any?