Tax - Income Tax Individuals (Easy)

INCOME TAX- INDIVIDUALS
Question 1
One of the following does not form part of gross income
Interest
Royalties
Annuities
Gifts, bequest and devices
Tax - Income Tax Individuals (Easy)
Question 2
One of the following is not subject to final tax
Interest on savings deposit
Royalties
Prizes amounting to more than P10,000
Professional fees paid to individuals
Question 3
The additional exemption is allowed to married and head of the family individual
taxpayers when the qualified dependent is a:
Parent
Brother or sister
Child
Any relatives by consanguinity
Question 4
The additional exemption is allowed to married and head of the family individual
taxpayers when the qualified dependent is a:
Parent
Brother or sister
Child
Any relatives by consanguinity
Question 5
Who is not a Philippine income tax payer?
a resident citizen of the Philippines with income from within and outside the Philippines
a resident of the Philippines with income from within the Philippines only
a non resident citizen of the Philippines with income from outside the Philippines only
a non citizen of the Philippines with income from within the Philippines only
Question 6
If the taxpayer is a resident citizen of the Philippines, which of the following is not
subject to income tax?
capital gain on sale of real property in the Philippines
interest on bank deposit in the Philippines
rent income from property outside the Philippines
capital gain on shares of stock of a domestic corporation sold thru the Philippine Stock
Exchange
Question 7
Which of the following is taxable?
agricultural land inherited
cash received as gift
Philippine Charity Sweepstakes winnings
interest on government bonds
Question 8
prize won in an essay contest
Nobel prize
prize won as member of mythical team in the PBA
award for being a model employee
agricultural land inherited
cash received as gift
Philippine Charity Sweepstakes winnings
interest on government bonds
Question 1
Jessica had recently joined the Company as sales executive. She was advised to be
retrenched because the company was losing heavily, but that she would be given a
substantial separation pay. The general manager suggested to Jessica to file a letter of
resignation from the company, instead of having been involuntarily separated as the
latter would have implications of efficiency on her part. Jessica chose to resign from the
company and received the sum of P200,000 as separation pay. The above amount is
Exempt from income tax
Taxable in full
Non-deductible expense on the part of the company
Partially taxable
Tax - Income Tax Individuals (Average)
Question 2
A was selected as the most outstanding teacher in her region. Her name was submitted
by the school principal without her knowledge. She received a trophy and a cash award
of P15,000
Taxable income
Subject to final tax
Partly taxable, partly exempt
Question 3
Premium paid for health and hospitalization insurance shall be allowed as a deduction
provided the following are met, which is the exception:
The amount claimed as a deduction does not exceed two thousand four hundred pesos
(P2,400) per year
Claimed by both spouses who avails basic personal exemption
Gross income of the family do not exceeds two hundred fifty thousand pesos
(P250,000)
The amount of premium payment claimed do not exceeds two hundred pesos (P200) a
month
Question 4
There is no taxable income until such income is recognized. Taxable income is
recognized when the
Taxpayer fails to include the income in his income tax return
Income has been actually received in money or its equivalent
Income has been received, either actually or constructively
Transaction that is the source of the income is consummated
Question 5
An example of a tax where the concept of the progressivity finds application is the
Income tax on individuals
Excise tax on petroleum products
Value-added tax on certain articles
Amusement tax on boxing exhibitions
Question 6
Income is considered realized for tax purposes when
It is recognized as revenue under accounting standards even if the law does not do so
The taxpayer retires from the business without approval from the BIR
The taxpayer has been paid and has received in cash or near cash the taxable income
The earning process is complete or virtually complete and an exchange has taken place
Question 7
Ito and Diana were legally separated. They had six minor children, all qualified to be
claimed as additional exemptions for income tax purposes. The court awarded custody
of two of the children to Ito and three to Diana, with Ito directed to provide full financial
support for them as well. The court awarded the 6 th child to Ito’s father with Ito also
providing full financial support. Assuming that only Ito is gainfully employed while Diana
is not, for how many children could Ito claim additional exemptions when he files his
income tax return?
6
5
3
2
Question 8
Jane is a Filipino manager assigned at the China Branch of SM Department Store. He
receives 2 salaries one from the Philippines and the other from China.
Philippine salaries are taxable and the China salaries are exempted
Philippine and China salaries are not taxable
Philippine and China salaries are taxable
Philippine salaries are exempted while China salaries are taxable
Question 9
John is an alien assigned in the Philippines to manage the regional area headquarters
of Deli France, a multinational company.
John wages and salaries are
tax at 15% on gross income
tax at 5%-32% on taxable income
exempted from tax being an area headquarters of a multinational
Question 10
As a rule, stock dividend is tax exempt because the recipient realizes no gain except
issuance of different classes of shares of stock
indirect dividend
liquidating dividend
treasury shares of stock
------------
Question 1
Z is a Filipino immigrant living in the United States for more than 10 years. He is retired
and he came back to the Philippines as a balikbayan. Every time he comes to the
Philippines, he stays here for about a month. He regularly receives pension from his
former employer in the United States amounting to US $1,000 a month. While in the
Philippines, with his pension pay from his former employer, he purchased three
condominium units in Makati which he is renting out for P15, 000 a month each. Does
the US $1,000 pension become taxable because he is now in the Philippines?
Yes, income received in the Philippines by non-resident citizens is taxable
Yes, income received in the Philippines or abroad by non-resident citizens is taxable
No, income earned abroad by non-resident citizens is no longer taxable in the
Philippines
No, the pension is exempt from taxation being one of the exclusions from gross income
Tax - Income Tax Individuals (Difficult)
Question 2
A worked for a manufacturing firm but due to business reverses, the firm offered a
voluntary redundancy program in order to reduce overhead expenses. Under the
program, an employee who offered to resign would be given separation pay equivalent
to his 3 months basic salary for ever year of service. A accepted the offer and received
P800,000 as separation pay under the program. After all the employees who accepted
the offer were paid, the firm found its overhead still excessive. Hence, it adopted
another program where various unprofitable departments were closed. As a result, B
was separated from the service, B also received P800,000 as separation pay. At the
time of separation both A and B was only 45 years old. As a result,
Both amounts are exempt from income tax
Both amounts are subject to income tax
Only Mr. A is subject to income tax
Only Mr. B is subject to income tax
Question 3
An overseas contract worker is allowed an additional exemption:
When he has no income from Philippines sources, and he has not waived his right over
the additional exemption for his dependent children.
When he has dependent children in the Philippines whom he provides chief support with
on a regular basis from his income wholly earned outside the Philippines.
When he and his wife have income from common property situated in the Philippines
that provides chief support to his minor dependents
Only when his qualified minor dependent children actually live with him abroad
Question 4
A non-resident alien engaged in trade or business (NRA-ETB) is allowed to claim
personal exemptions subject to certain conditions. Which of the following is not a
condition for the allowance of personal exemptions to non-resident alien engaged in
trade or business (NRA-ETB)?
The foreign country of which the NRA-ETB is a subject or citizen has an income tax law
The income tax law of the NRA-ETB’s country allows personal exemption to citizens of
the Philippines not residing therein
The NRA-ETB files a true and accurate return of his income from all sources within the
Philippines
The NRA-ETB is married to a citizen of the Philippines
Question 5
Requirements in order that retirement benefits may be exempt from income tax:
must be paid to an employee who is at least 60 years old and has served his employer
for at least 10 years
exemption from taxation of retirement benefit must be availed of only once
the benefit must be received under an existing Collective Bargaining Agreement
All of the above
Question 6
A purely compensation earner is granted a tax refund upon resignation from his
employment, together with his last salary pay. The amount comprising the tax refund
represents excess tax withheld by the company from his salary. The tax refund amount
is classified as
taxable income
not taxable income
subject to final withholding tax
tax exempt
Question 7
Jonas Joson, a manager in Splash Corporation, is given a free trip to the US with his
wife and family. The Company paid for all of the expenses of the said trip. He would be
compelled to report the trip in his personal income tax return as
additional compensation income
professional fees
both the trip and the fringe benefits tax paid would be recorded in his ITR
no item of the trip and the tax paid should be reported in his ITR
Question 8
Joe Champs, an Irish residing in London, received dividends from Toronto Company, a
company registered in Toronto, Canada but whose profits are totally sourced from its
fishing business in the Philippines. The dividends received by Joe are
not taxable in the Philippines since Joe is a nonresident alien
taxable in the Philippines to the extent of 50% of the gross amount of the dividends he
receives
taxable in full in the Philippines
taxable only in the Philippines if Joe gains residency in the Philippines
Question 9
Which is not required to file an income tax return?
Adam, a businessman with total earnings of P50,000 for 2014 but who is married and
has 4 children (thus, with personal and additional exemption of P64,000)
Larry, who derived purely compensation income from 2 employers in 2014 for a total
amount of P40,000
Edge, a nonresident alien whose only income in 2014 was subjected to final witholding
tax
Paul, who derived purely compensation income from just one employer for a total
amount of P1,000,000
Question 10
Mr. Ching was an office clerk in the company he was working in. The company grants a
transportation allowance for Ching in the amount of P5,000 per month despite the fact
that his work requires him to stay in the office the whole day. As explained by his boss,
the same is to cover his transportation through and from the office to his home. The said
transportation allowance is
not taxable on the part of Mr. Ching because it is for the employers convenience
not taxable on the part of Mr. Ching because it is a de minimis benefit
taxable on the part of Mr. Ching as a fringe benefits tax
taxable on the part of Mr. Ching as additional compensation income
A privilege granted a taxpayer to deduct or set-off against Phil. Income tax, the income,
and excess profits taxes that he has paid or has accrued to a foreign country.
Tax exemption
Tax deduction
Tax consolidation
Tax credit
Requirements in order that retirement benefits may be exempt from income tax:
must be paid to an employee who is at least 60 years old and has served his employer for at least
10 years
exemption from taxation of retirement benefit must be availed of only once
the benefit must be received under an existing Collective Bargaining Agreement
All of the above
ane Cruz, a non resident Filipina, earned commission for his work as a buying agent
based in Germany buying goods in Germany for sale in the Philippines. The payor of
the said service was X Corporation which is based in the Philippines, the payment to
Jane Cruz was subjected to a 10% witholding tax for the services Ms. Cruz performed.
The subjecting of the said commission income to witholding tax is
correct because the payment for the service was from a Philippine source
correct because Ms. Jane Cruz is a Filipino non resident
incorrect because the services was done outside the Philippines and is not considered a
Philippine source income
incorrect because the sale of the goods were done in Germany which is outside the territorial
jurisdiction of the Philippines taxing authority.
A Filipino citizen maintains a bank in the UK. She earns passive income of 3% per
annum at the end of the taxable year, she declared an interest income amounting to
1,000 Euro that said account. What applicable tax should be imposed on the said
income?
final tax rate of 20%
final tax rate of 7.5%
graduated rate of income tax (5-32%)
none, it is exempt from income tax since it is not derived from sources within the Philippines
Question 1
John is an alien assigned in the Philippines to manage the regional area headquarters
of Deli France, a multinational company.
Matthew is John counterpart in the said office and receives the same salary as John.
Matthew’s salary is
exempted from tax like John
tax at 5%-32% on taxable income
Question 2
Jun has been classified out of the country for work from 2000-2009. He returned to the
Philippines in June 5, 2010 to reside permanently in the Philippines. For taxable year
2010, he had income from January 1 to June 4, 2010 from Philippine sources of
P300,000 and from foreign sources of P P200,000. He had income from June 6 to
December 31, 2010 of P600,000 from Philippine sources and of P400,000 from foreign
sources.
For taxable year 2010, Jun’s exempt income as a non resident citizen would be
200,000
300,000
500,000
600,000
Question 3
Park Shin is a Korean national residing in Hongkong, China who visits the Philippines
for month each year visit his sister, During said visits, he sells Kimchi t0 his friends and
relatives in the Philippines. He now approaches you to seek advice regarding the tax
aspect of his transaction. Which of the following advice is most appropriate?
just pay the 30% tax on his gross receipts from his sale of Kimchi
apply for Optional Standard Deduction so will not have to bring to Manila the proof of his
expenses to qualify for deduction
apply for tax relief under the Philippine-China tax treaty
use the Branch Profit Remittance tax rate of only 15%
Question 4
The optional standard deduction is applicable under the National Internal Revenue
Code which provides that taxpayers shall be allowed the following as an optional
deduction in lieu of the itemized deduction.
10% optional standard deduction based on gross income for both individual and
corporations
40% optional standard deduction based on gross receipts for both individual and
corporation
10% optional standard deduction based on gross receipts for individuals and 40% OSD
for corporations based on gross income
40% optional standard deduction for both individuals and corporations with individuals
based on their gross sales or receipts while corporations would be based on gross
income
Question 5
Except as otherwise may be provided, the following individuals are required to file an
income tax return, except
Every Filipino citizen residing in the Philippines
Every Filipino citizen residing outside the Philippines, on his income from sources
without the Philippines
Every alien residing in the Philippines on income derived from sources within the
Philippines
Every non-residents alien engaged in trade or business or in the exercise of a
profession in the Philippines
Question 6
Who among the following is a nonresident citizen of the Philippines?
a citizen of the Philippines who left on a round the world tour with his family for more
than 6 months
a citizen of the Philippines who was sent by his Company to work in China for 6 months
on a special project
a citizen of the Philippines who leaves the Philippines during the taxable year to reside
abroad as an immigrant
a citizen of the Philippines who has left in 1990 and comes back in January 2011 to
reside here permanently after selling all his properties abroad and has no other income
from abroad.

Question 7
Jonas Joson, a manager in Splash Corporation, is given a free trip to the US with his
wife and family. The Company paid for all of the expenses of the said trip. He would be
compelled to report the trip in his personal income tax return as
additional compensation income
professional fees
both the trip and the fringe benefits tax paid would be recorded in his ITR
no item of the trip and the tax paid should be reported in his ITR
Question 8
A Filipino citizen maintains a bank in the UK. She earns passive income of 3% per
annum at the end of the taxable year, she declared an interest income amounting to
1,000 Euro that said account. What applicable tax should be imposed on the said
income?
final tax rate of 20%
final tax rate of 7.5%
graduated rate of income tax (5-32%)
none, it is exempt from income tax since it is not derived from sources within the
Philippines
Question 9
“A” is a single and gainfully employed, She is the only child of “B” who is already of an
advanced age and depends solely on “A” for sustenance. “A” has a live-in partner in the
person of “X” who had a child out of wedlock with another woman. The child is a minor
and is physically incapacitated and since “X” was not employed, both depend on “A” for
survival. “X” subsequently dies leaving “X”s child an orphan but in the physical custody
of “A”. How much is “A”s personal exemption?
P50,000 because “B” and the child do not qualify as dependents
P75,000 because “B” qualifies as dependent but not the child
P100,000 because both “B” and the child qualify as dependents
P75,000 because a “dependant” is defined as a child dependent upon and living with
the taxpayer and is below 21 years of age hence the child of “X” who now lives with “A”
is a dependent.
Question 10
Jomel has been an employee of San Miguel Corporation for 19 years. On April 1, 2015,
Jomel will celebrate his 49th birthday and, on the same day, retire from his company.
Jomel’s retirement benefits will
be tax exempt
be subject to tax since he has only been employed for 19 years
be subject to tax since he is only 49 years old
be either exempt from or subject to income tax depending on whether the retirement
plan is BIR registered.
--------
A taxpayer received a certain sum of money erroneously through the crediting of his
bank account. The taxpayer knew of this error and informed the bank which did nothing
in relation to the said error. The taxpayer then prepared his income tax return and did
not include the amount erroneously received as part of his income for the year. No
mention was made on this matter in his financial statements or income tax return. The
said constitutes
willful intent to evade taxes which can constitute fraud
failure to file a return
not a basis for fraud because the money was not owned by the taxpayer
basis for the imposition of donor’s tax
The NIRC requires that ordinary and necessary deductions should be deducted in the
income tax computation of taxpayers, when
the deduction is paid
the deduction is accrued
the deduction is both paid and accrued
the taxpayer needs to record the expense
The rule on wagering losses provides that

you can claim all your losses provided that you report all your income from wagering
transactions
you are limited to claim your wagering losses only to the extent of your wagering gains
you are not allowed to claim wagering losses
you can claim your wagering losses provided that the same occurred in legitimate gaming
activities
Mr. Steve, a German carpenter residing in Finland, constructed a stage for Paul
Hewson, an Iraqi national residing in Manila. The stage, which is to be used for Mr.
Hewson concert on April 14, was completely constructed in Finland but was shipped to
Manila after completion. Mr. Hewson pays Mr. Lilywhite service fees for the
construction. The fees paid to Mr. Lilywhite are
taxable since it is considered Philippine source income
not taxable since it is not a Philippine source income
taxable since the stage was later on shipped to Manila, even if the services were in fact
performed in Finland
not taxable since Mr. Hewson is not a Filipino
An individual engaged in business earned net income which is less than his personal
and additional exemptions during the year. Is he required to file an income tax return?
no, because he is not liable for any tax
yes, because he is required to file a tax return notwithstanding such loss
yes, because he still incurs income tax liabilities notwithstanding the foregoing facts
no, because individual taxpayers whose gross income is less than his personal exemptions need
not file returns.
Which of the following would be prejudicial to the status of a taxpayer during the year?
dependent marries
dependent changes his residence
dependent reached 21 years of age
dependent became gainfully employed
A purely compensation earner is granted a tax refund upon resignation from his
employment, together with his last salary pay. The amount comprising the tax refund
represents excess tax withheld by the company from his salary. The tax refund amount
is classified as
taxable income
not taxable income
subject to final withholding tax
tax exempt
ane Cruz, a non resident Filipina, earned commission for his work as a buying agent
Question 1
Gain on sale of domestic shares of stock in New York is
Income within the Philippines

Income without the Philippines
Income party within and without
Question 2
Which of the following income earners is required to file income tax return?
Minimum wage earners
Non-resident alien not engage in business
An individual with respect to pure compensation income derived from such sources within the
Philippines, the income tax on which has been correctly withheld and that an individual deriving
compensation from one employer at any time during the taxable year.
General professional partnership
Question 3
Which of the following is deductible expense to arrive at the taxable income?
Personal, living or family expenses

Any amount paid for new buildings of for permanent improvements, or betterment made to
increase the value of any property or estate
Any amount expended in restoring property or in making good the exhaustion thereof which an
allowance is or has been made
Premiums paid on any life insurance policy covering the life of any officer or employee, when
the immediate family member of the insured officer or employee is directly the beneficiary
Question 4
Which among the following Government owned and Controlled Corporations is taxable?
Philippines Amusement and Gaming Corporation

Social Security System
Philippine Health Insurance Company
Philippine Charity Sweepstakes Office

Question 5
The excess of allowable deductions over gross income of the business in a taxable year is
known as
Net operating loss

Ordinary loss
Net deductible loss
NOLCO
Question 6
The following income are not taxable, except
salary of farm workers in the form of products raised in the farm

separation pay of employees who voluntarily resigned
value of leasehold improvement constructed on the leased land
increase in market value of land
Question 7
The source of interests on bonds, notes or other interest bearing obligations of residents,
corporate or otherwise is determined by
residence of the oblige

physical location of the securities
residence of the obligor
place of payment

Question 8
Gains, profits, and income from the sale of real property located in the Philippines are deemed
as income from
sources without the Philippines

sources within the Philippines
sources from within and without the Philippines
sources depending upon the income earner
Question 9
Which of the following is a deductible expense?
personal, living or family expenses

amounts expended in restoring property or in making good the exhaustion thereof for which an
premiums paid on any life insurance policy covering the life of any officer or employee when the
officer or employee is directly or indirectly the beneficiary under such policy
none of the above
Question 10
Which of the following statements is not correct?
interest on government securities is now tax exempt effective January 1, 1998

stock dividend is tax exempt
premium on life insurance may be taxable to the employee
fringe benefit is subject to 32% final tax effect January 1, 2000
Question 1
All of the following taxpayers are not entitled to foreign tax credit, except
Resident citizen with income from income only from the Philippines
Resident citizen with income only from abroad
Resident alien with income from within and without the Philippines
Non-resident citizen with income from within and without the Philippines
Question 2
Which among the following Government owned and Controlled Corporations is taxable?
Philippines Amusement and Gaming Corporation

Social Security System
Philippine Health Insurance Company
Philippine Charity Sweepstakes Office
Question 3
Mr. H and Mrs. W married couple had the following data in year 2014. Only Mr. H has gainful
employment. Two dependents, a legitimate son 21 years old and daughter 19 years old but
newly-wed. The personal and additional exemption of the couple:
H (100,000); W (50,000)
H (100,000); W (0)
H (50,000); W (50,000)
H (50,000); W (0)
Question 4
An example of a tax where the concept of the progressivity finds application is the
Income tax on individuals

Excise tax on petroleum products
Value-added tax on certain articles
Amusement tax on boxing exhibitions
Question 5
Ito and Diana were legally separated. They had six minor children, all qualified to be claimed as
additional exemptions for income tax purposes. The court awarded custody of two of the
children to Ito and three to Diana, with Ito directed to provide full financial support for them as
well. The court awarded the 6th child to Ito’s father with Ito also providing full financial support.
Assuming that only Ito is gainfully employed while Diana is not, for how many children could Ito
claim additional exemptions when he files his income tax return?
6
5
3
2
Question 6
A dealer in securities has the following data for the year 2010:
Sales, shares held as inventory 4,000,000
Sales, shares held as investment 1,500,000

Cost, shares held as inventory 2,000,00
Cost, shares held as investment 500,000
Supplies expense, net of VAT 100,000
Rent expense, net of VAT 200,000
How much is the taxable net income assuming the dealer is single?
2,680,000
2,650,000
1,650,000
Not subject to income tax
Question 7
Tips and gratuities paid directly to an employee by a customer and not reported to the employer
taxable compensation income and subject to withholding tax

not taxable
taxable compensation income but not subject to withholding tax
subject to donor’s tax
Question 8
The following items are taxable except
illegal gains
tax refund involving deductible tax
tax refund involving non-deductible tax
cash dividend
Question 9
A minimum wage earner receives additional compensation on his part-time teaching in 3
vocational schools and from his real estate broker’s commissions will be taxed
only as to the other income sources

on the minimum wage income only
to the additional income sources but exempted to the minimum wage
on all the income both to the minimum wage and the additional income sources
Question 10
Which of the following is a deductible expense?
personal, living or family expenses

amounts expended in restoring property or in making good the exhaustion thereof for which an
premiums paid on any life insurance policy covering the life of any officer or employee when the
officer or employee is directly or indirectly the beneficiary under such policy
none of the above
One of them is not considered non-resident citizen

A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of
this physical presence abroad with a definite intention reside therein
A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad,
either as an immigrant or for employment on permanent basis
A citizen of the Philippines who works and derives income from abroad and whose employment
thereat requires him to be physically present abroad most of the time during the taxable year
A citizen of the Philippines who went on a business trip abroad and stayed therein most of the
time during the year
A worked for a manufacturing firm but due to business reverses, the firm offered a
voluntary redundancy program in order to reduce overhead expenses. Under the
program, an employee who offered to resign would be given separation pay equivalent
to his 3 months basic salary for ever year of service. A accepted the offer and received
P800,000 as separation pay under the program. After all the employees who accepted
the offer were paid, the firm found its overhead still excessive. Hence, it adopted
another program where various unprofitable departments were closed. As a result, B
was separated from the service, B also received P800,000 as separation pay. At the
time of separation both A and B was only 45 years old. As a result,
Both amounts are exempt from income tax

Both amounts are subject to income tax
Only Mr. A is subject to income tax
Only Mr. B is subject to income tax
An individual engaged in business earned net income which is less than his personal
and additional exemptions during the year. Is he required to file an income tax return?
no, because he is not liable for any tax
yes, because he is required to file a tax return notwithstanding such loss
yes, because he still incurs income tax liabilities notwithstanding the foregoing facts
no, because individual taxpayers whose gross income is less than his personal exemptions need
not file returns.
Expenses incurred by movie actors and actresses, relating to their beautification

expenses are
allowed as an expense because the same is related to their profession
disallowed as an expense because the same is personal in nature
allowed as an expense provided that it has been subjected to the withholding tax regardless of the
nature
disallowed as an expenses because it is not connected with their trade or business
A is indebted to B in the amount of P100,000. For the services rendered by C, the
brother of A, in favor of B, B forgave the indebtedness of A. What is the income tax
consequences of this transaction?
C shall be liable for donor’s tax
there is no income tax consequence for all parties
only C shall declare an income in the amount of P100K. No income tax consequence for A and B
Only A shall declare an income in the amount of P100K. No income tax consequence for B and
C
An employee receiving less than P240,000 per annum and is classified as a minimum
wage earner shall
not be subjected to the withholding tax system on his salary received
not be subjected to the income tax on the salary received
be allowed to claim the additional deduction of P2,400 for medical insurance premiums paid on
the premise that he availed of the same
be allowed to claim the personal exemption of his or her spouse amounting to P50,000 pesos
even if the spouse is not working
Jane Cruz, a non resident Filipina, earned commission for his work as a buying agent
An irrevocable trust was created whereby Mr. Jonas Velasco transferred his commercial
apartment to the Philippine Trust Company as trustee. The trust instrument designated
Mrs. Josefa Velasco as the beneficiary to the rentals for life and appointed their only son
to the remainder. Which of the following statements best describes the taxability of the
trusts?
The transfer by Mr. Velasco is subject to donor’s tax while the rentals accruing to Mrs. Velasco is
exempt from income tax as property acquired by gift.
The transfer by Mr. Velasco is subject to donor’s tax while the rentals accruing to Mrs. Velasco is
subject to income tax.
The transfer by Mr. Velasco is subject to donor’s tax but the rentals accruing to Mrs. Velasco is
subject to donor’s tax being the nature of usufruct.
The transfer of the apartment to the trustee is subject to estate tax upon the death of Mr. Velasco

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INCOME TAX- INDIVIDUALS