TAXATION Casiño Review Center First Pre-board Examination

Basic Principles of Taxation 7. Which of the following is not an exemption of certain acquisitions and transmissions.
1. One of the following is not within the scope of legislative taxing power? A. The merger of usufruct in the owner of naked title;
A. The person, property or occupation to be taxed. B. The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to
B. The amount or rate of tax. the fiducomissary;
C. The enforcement and administration of tax. C. The transmission from the first heir, legatee or done in favor of another beneficiary, in
D. The purpose of the tax provided it is public. accordance with the desire of the predecessor;
D. All bequests, devices, legacies or transfers to social welfare, cultural and charitable
2. It is the minimization of tax liabilities through legal means institutions, no part of the net income of which inures to the benefit of any individual.
A. Tax avoidance C. Tax evasion
B. Tax exemption D. Tax fraud 8. 1st Statement: Jewelry is always exclusive property.
2nd Statement: Under the Conjugal Partnership of Gains, Vanishing Deduction is always a
3. 1st Statement: A taxpayer's exempt status justifies non-keeping of books of account and other deduction from the decedent's exclusive properties.
accounting record. A. B. C. D.
2nd Statement: Tax avoidance is not forbidden in our jurisdiction. 1st Statement True True False False
A. B. C. D. 2nd Statement True False True False
st
1 Statement True True False False
2nd Statement True False True False 9. 1st Statement: A standard deduction for purposes of computing net taxable estate of one (1)
million is always allowed.
Income Tax Patterns 2nd Statement: Medical expenses for purposes of computing net taxable estate have a
4. 1st Statement: Zonal value of real property is, determined by the provincial and city assessors. maximum allowable amount of two hundred thousand pesos (P200,000).
2nd Statement: Assessed value of real property is, determined by the Commissioner. A. B. C. D.
A. B. C. D. 1st Statement True True False False
st
1 Statement True True False False 2nd Statement True False True False
2nd Statement True False True False
10. 1st Statement: A Certified Public Accountant is necessary for the certification of the estate tax
Estate Tax return with a gross value exceeding two hundred thousand pesos (P200,000).
5. One of the following is not a special deduction for purposes of computing net estate of a 2nd Statement: A notice of death shall be filed within one (1) month from the date of death to
Citizen or Resident. the Commissioner if the gross estate of the decedent exceeds twenty thousand pesos
A. Standard Deductions C. Family home (P20,000).
B. Claims against an insolvent person D. Medical expenses A. B. C. D.
1st Statement True True False False
6. One of the following is not an allowable deduction for computation of net taxable estate of a 2nd Statement True False True False
non-resident alien.
A. Expenses, losses, indebtedness and taxes
B. Property previously taxed
C. Transfer for public purposes
D. Standard deductions

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TAXATION Casiño Review Center First Pre-board Examination

11. 1st Statement: Extension of payment of estate tax may be granted by the Commissioner for a Donor’s Tax
period exceeding five (5) years in cases of judicial settlement. 15. In donor's tax, who is a stranger?
2nd Statement: Extension of payment of estate tax maybe granted by the Commissioner for a A. Legally adopted child C. Step-brother or sister
period exceeding two (2) years in cases of extra-judicial settlement. B. Half-blood brother or sister D. First cousin
A. B. C. D.
1st Statement True True False False 16. 1st Statement: Any contribution in cash or in kind to any candidate, political party or coalition of
2nd Statement True False True False parties for campaign purposes shall be governed by the Election Code and not the Tax Code.
2nd Statement: When the donee or beneficiary is a stranger, the tax payable by the donor shall
12. 1st Statement: Expenses of the extra-judicial settlement of the estate are allowable as judicial be thirty percent (30%) of the gross gifts.
expense. A. B. C. D.
st
2nd Statement: Donation to take effect after the Donor's death is governed by the law on estate 1 Statement True True False False
taxation. 2nd Statement True False True False
A. B. C. D.
1st Statement True True False False 17. All of the following are subject to donor's tax in case there is a transfer for less than adequate
2nd Statement True False True False and full consideration, except:
A. Real property C. Intangible
13. Mr. Roger Rabbit citizen and resident of the United States of America, died in the Philippines. B. Personal property D. Tangible property.
Leaving behind his estate which includes a house and lot in Hollywood, California fairly valued
at P5,000,000. His executor declared that such property was the decedent's family home. The 18. Which of the following is a taxable gift hence subject to donor's tax?
allowable family home deduction would be A. Dowries or gifts made on account of marriage and before its celebration or within one year
A. P5,000,000 C. P 0 thereafter by parents to each of their legitimate, recognized natural or adopted children.
B. P2,500,000 D. P1,000,000 B. Gifts made to or for the use of the National Government.
C. Gifts made to or for the use of any entity created by any National Government agencies,
14. Mr. Ronnie Yeser, a Filipino citizen, single, died on December 24, 2003. Leaving behind his which is not conducted for profit, or to any political subdivision of the said Government.
entire estate fairly valued at P8,000,000. His estate's allowable expenses, losses, D. Gifts in favor of an educational and/or charitable, religious, cultural or social welfare
indebtedness and taxes amount to P750.000. Included in his estate were a car and a house corporation, institution, foundation, trust or philanthropic organization or research
and lot, which he received as a gift and as an inheritance respectively. institution or organization. Provided, however, that not more than thirty percent (30%) of
FMV at the time it FMV at the time of the said gifts shall be used by such donee for administrative purpose.
Date Received
was transferred Decedent's death
19. 1st Statement: A credit for donor's tax paid to a foreign country shall be allowed to a donor who
Car 12/05/2002 350,000 250,000
is not a citizen and not a resident.
House and Lot 12/31/2002 2,000,000 2,500,000
2nd Statement: The allowable credit for donor's tax paid to a foreign country shall be the actual
How much would be the estate's vanishing deduction? amount paid to the foreign country.
A. P1,993,750 C. P1,812,500
A. B. C. D.
B. P2,039,063 D. P2,000,000 st
1 Statement True True False False
2nd Statement True False True False

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TAXATION Casiño Review Center First Pre-board Examination

20. 1st Statement: The donor's tax return must be filed within one month from the date of donation. 25. One of the following is a transaction deemed sale under value added tax.
2nd Statement: Donation made to a legally adopted child shall entitle the non-resident alien A. Transfer, use or consumption in the course of business of goods or properties intended for
donor to a deduction for dowry. Provided the gift was made on account of marriage and given sale or for use in the course of business.
before or within one year after its celebration. B. Distribution or transfer to creditors in payment of debt of goods held for sale.
A. B. C. D. C. Consignment of goods if actual sale is not made within forty (40) days from the date the
1st Statement True True False False goods were consigned.
2nd Statement True False True False D. Retirement from or cessation of business with respect to beginning inventories of taxable
goods existing as of such retirement or cessation.
21. 1st Statement: Donor's tax return is filed within thirty (30) days after the date the gift is made
and the tax due thereon shall be paid at the time of filing. 26. Which of the following transactions is exempt from value added tax.
2nd Statement: Except in cases when the Commissioner otherwise permits, the donor's tax A. Sale by an art gallery of literary works, musical composition, work of art and similar
return shall be filed and the tax paid to an authorized agent bank, the Revenue District Officer, creations, or devices performed for the production of such works.
Revenue Collection Officer or duly authorized Treasurer of the city or municipality where the B. Medical, dental hospital and veterinary professional services.
donor was domiciled at the time of the transfer. C. Sale of cotton and cotton seeds in their original state.
A. B. C. D. D. Sale of books and any newspaper, magazine, review or bulletin, which appears at regular
intervals with, fixed prices for subscription and sale and which is devoted principally to the
1st Statement True True False False
publication of paid advertisements.
2nd Statement True False True False
27. All of the following are exempt from both the VAT and other percentage taxes, except one:
Value-added Tax A. Sale by the artist himself of his works of art.
22. Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or B. Sale of goods other than those mentioned in paragraphs A to Y of section 109 of the Tax
properties renders services, and any person who imports goods shall be subject to: Code where the annual gross receipts does not exceed P550,000.
A. Business tax C. Other percentage tax C. Lease of residential unit with a monthly rental of P8,000.
B. Value-added tax D. Excise tax D. Export sales by persons who are not VAT - registered.
23. 1st Statement: The term "goods" for value added tax purposes shall mean all tangible and 28. Sugarland is a processor of refined sugar. It purchases sugarcane from farmers for processing
intangible objects which are capable of pecuniary estimation and shall include, but not limited into refined sugar. It had the following tax-exclusive transactions for the year 2003.
to radio, television, satellite transmission and cable television time. Sales P 990,000
2nd Statement: The term "export sales" for VAT purposes shall include, but not limited to sale of Export sales 110,000
gold to the Bangko Sentral ng Pilipinas. Purchase of sugarcane 330,000
A. B. C. D. Purchase of supplies 220,000
1st Statement True True False False Purchase of capital goods 110,000
2nd Statement True False True False What is the VAT payable of Sugarland?
A. P30,000 C. P55,050
24. Persons or firms engaged in the processing of sardines, mackerel and milk, and in B. P33,000 D. P61,050
manufacturing refined sugar and cooking oil, shall be allowed.
A. Creditable Input tax C. Presumptive input tax
B. Transitional input tax D. Refundable input tax

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TAXATION Casiño Review Center First Pre-board Examination

29. In the month of August, Vater's total invoice price and costs are as follow. 34. 1st Statement: All common carriers are subject to the 3% percentage tax.
Local sales P 330,000 2nd Statement: Assuming an annual gross receipt in excess of P100,000, carriage of
Abroad sales 770,000 passenger's using four wheeled animal drawn vehicle is subject to the 3% common carriers'
Purchases of good exported 220,000 tax.
Purchases of goods 110,000 A. B. C. D.
Operating expenses 110,000 1st Statement True True False False
The VAT payable is 2nd Statement True False True False
A. P 0 C. P70,000
B. P20,000 D. P40,000 35. The Elorde Promotions, Inc., is a sports promoter, which leases the Parañaque Coliseum at a
monthly rental of P200,000. It conducts boxing exhibitions and other games in the coliseum. In
30. 1st Statement: Export sales by a non-VAT registered person is, exempt from the VAT. a given quarter, it had the following gross receipts from boxing exhibitions. Gate receipts,
2nd Statement: Importations by a non-VAT registered person is exempt from VAT P500,000; sales of food at the canteen of the coliseum P900,000; sale of television rights,
A. B. C. D. P400,000. The quarterly rental expenses amount P600,000.
1st Statement True True False False The tax liability of Elorde is:
2nd Statement True False True False A. 180,000 value added tax C. 120,000 value added tax
B. 180,000 percentage tax D. 120,000 percentage tax
Percentage Taxes
31. A merchant of stock or securities, whether an individual, partnership or corporation, with an Other Taxes Affecting Business
established place of business, regularly engaged in the purchase of securities and the resale 36. 1st Statement: Excise taxes imposed and based on weight or volume capacity or any other
thereof to customers; and who, as a merchant, buys securities and resells them to customers physical unit of measurement shall be referred to as ad valorem tax.
with a view to the gains and profits that may be derived there from. 2nd Statement: Excise taxes imposed and based on selling price or other specified value of the
A. Dealer in securities C. Underwriters goods shall be referred to as specific tax:
B. Stock brokers D. Stock merchants A. B. C. D.
st
1 Statement True True False False
32. 1st Statement: Sale by a stock dealer of shares of stocks through the local stock exchange is 2nd Statement True False True False
subject to the stock transactions tax.
2nd Statement: Sale by a stock dealer of shares of stocks direct to buyer is subject to the Value Remedies of the State & the Taxpayer
Added Tax. 37. A suit questioning the validity of expenditures of public fund.
A. B. C. D. A. Representative suit C. Taxpayer's suit
st
1 Statement True True False False B. Derivative suit D. Class suit
2nd Statement True False True False
Local Taxation
33. Mr. Yoso a jeepney operator has 3 jeepneys plying Metro Manila. Jeepney No. 1 was 38. One of the following is not considered taxes, fees and charges specifically deemed to be
inoperative for two months earning only a gross receipt of P2,000. Jeepney Nos. 2 and 3 national internal revenue taxes:
reported a quarterly gross receipt of P3,000 and P2,300 respectively. The common carrier's A. Income taxes C. Business taxes
tax payable by Mr. Yoso for the quarter ending is? B. Estate and donor's taxes D. Documentary stamp taxes
A. P234 C. P219
D. P780 D. P730
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TAXATION Casiño Review Center First Pre-board Examination

39. All of the following are National Business Taxes, except for one. Answer Key
A. Franchise Tax on public utilities. C. Amusement Tax on movie houses. 1. C 11. D 21. A 31. A
B. Value Added Tax on sale of goods. D. Excise Tax on importation of wines. 2. A 12. A 22. B 32. C
3. C 13. C 23. A 33. A
Comprehensive 4. D 14. A 24. C 34. C
40. 1st Statement: For a person to be subjected to any business tax. It is necessary that he is 5. B 15. C 25. B 35. B
regularly engaged in the conduct or pursuit of an economic activity. 6. D 16. B 26. C 36. D
2nd Statement: A non-resident foreign artist performing in a one-night concert in the Philippines 7. D 17. A 27. B 37. C
shall be liable to VAT. 8. C 18. A 28. D 38. C
A. B. C. D. 9. D 19. D 29. A 39. C
st
1 Statement True True False False 10. D 20. D 30. B 40. C
2nd Statement True False True False

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