Answer Key Handouts

5.
A husband and wife, resident citizens, with one (1) qualified dependent child, had the following
income and expenses for the year 2009. The husband waived the additional exemption in favor of
his wife.
Salary of the husband, net of P50,000 withholding tax P 450,000
Salary of the wife, gross of P60,00 withholding tax 600,000
Gross professional income, husband, gross of 15% withholding tax 1,500,000
Cost of services-husband 500,000
Expenses, practice of profession 300,000
Gross sales, wife 800,000
Cost of sales wife 300,000
Business expenses, wife 100,000
Gross rent income, lease of common property, gross of 5% withholding tax 700,000
Expenses, leased common property 200,000
Business income, Singapore 600,000
Business expenses, Singapore 150,000
Question 1 - How much was the taxable income of the husband and wife using itemized
deduction?
2 – How much was the taxable income of the husband and wife using optional
standard deduction?
Itemized Deduction
Item Husband Wife
Salary-Wife P500,000
Salary-Husband P600,000
Less: Basic Personal Exemption 50,000 50,000
Additional Exemption - 25,000
Taxable Compensation Income (A) P450,000 P525,000
Gross Professional Income 1,500,000

Cost of services-husband (500,000)
Expenses-Profession (300,000)
Gross sales Wife 800,000
Cost of sales-Wife (300,000)
Business expense-Wife (100,000)
Gross rent income (700,000/2) 350,000 350,000
Expenses leased property (200,000/2) (100,000) (100,000)
Business Income Singapore (600,000/2) 300,000 300,000
Business expenses, Singapore (150,000/2) (75,000) (75,000)
Net income from Business & Profession (B) P1,175,000 P875,000
Taxable Net income (A+B) P1,625,000 P1,400,000

Optional Standard Deduction
Item Husband Wife
Salary-Wife P500,000
Salary-Husband P600,000
Less: Basic Personal Exemption 50,000 50,000
Additional Exemption - 25,000
Taxable Compensation Income (A) P450,000 P525,000
Gross professional income P1,500,000

Gross sales P800,000
Gross rent income (700,000/2) 350,000 350,000
Business Income Singapore (600,000/2) 300,000 300,000
Total 2,150,000 1,450,000
Less: OSD (40%) Total *40% 860,000 580,000
Net income Business and Profession (B) 1,290,000 870,000
Taxable net income 1,740,000 1,395,000
8) Exercises
a. An individual taxpayer holds shares of stock as investment. During the current year, he sold the
shares he bought for P100,000 for P180,000 directly to a buyer. How much is the capital gains
tax on the sale if any?
b. An individual taxpayer holds shares of stock as investment which he bought for P500,000.
During the current year, he sold it directly to a buyer for P750,000. How much is the capital
gains tax on the sale, if any?
c. An individual taxpayer invested P300,000 in the common shares of SMC Corp. During the
current year, he sold these shares directly to a buyer for P250,000. How much is the capital
gains tax on the sale, if any?
d. During the year 2011, Ms. Kat Antonio sold her vacation house for P500,000. She acquired it
for P700,000 two (2) years ago. The fair market value of the vacation house at the time of sale
was P800,000. Ms. Antonio was going to use the proceeds to build her new principal residence
within eighteen (18) months after informing BIR within thirty (30) days of such intention. How
much is the capital gain tax, if any?
e. Mr. C. Avenido acquired his principal residence in 2009 at a cost of P1,000,000. He sold the
said property on January 1, 2011, with a fair market value of P5,000,000 for a consideration of
P4,000,000. Within the 18-month reglementary period he purchased his new principal residence
at cost of P7,000,000.
Question 1 - How much is the capital gains tax due?
2 - How much is the basis of the new principal residence?
f. Using the same data in letter d, if for example, Mr. Avenido acquired his new principal residence
within the 18-month reglementary period but did not utilize the entire proceeds of the sale in
acquiring his new principal residence because he only used P3,000,000 thereof in acquiring his
new principal residence.
Question 1 - How much is the capital gains tax?

Answers:
A. P4,000
B. P20,000
C. Zero- Listed Corporation
D. SP-500,000
FMV-800,000
The capital gains tax is P800,000 times 6% =48,000
The transaction is subject to CGT because the taxpayer BUILD his new residence and does
not purchase. It must be noted that the tax code states that it must be purchased or bought.
E. Cost- 1,000,000
Selling Price-4,000,000
FMV-5,000,000
Utilized (purchase of new residence)-7,000,000
1 - How much is the capital gains tax due?
P0 (He used all of the proceeds or the selling price to purchase a new residence)

Historical cost + Additional Cost
1,000,000 + 3,000,000* = P4,000,000
* 7,000,000 -4,000,000
F. 1 - How much is the capital gains tax?

Unutilized /TotalSelling price X Escrow (Capital gains Tax should be)
1M*/4M X 300,000 = P75,000
* 4M-3M=1M

Utilized/Total X Historical Cost
3,000,000/4,000,000 X1,000,000= P750,000
Tax Rates for Special Aliens and their Filipino Counterparts

. A married resident citizen has four (4) qualified dependent children. He has the following data on income and expenses for the year
2011:
Salary, Philippines, gross of withholding tax of P5,000 P 60,000
Gross business income, Philippines (gross sales, P1,200,000) 500,000
Business expenses, Philippines 180,000
Gross business income, USA (gross sales, P1,500,000) 900,000
Business expenses, USA 300,000
Interest income from bank deposit, Philippines 50,000
Interest income from bank deposit, USA 70,000
Interest income from domestic depository bank under EFCDS 80,000
Royalty on book published in the Philippines 100,000
Prize in a contest he joined in the Philippines 5,000
Philippine Charity Sweepstakes winnings 1,000,000
Gain from sale of shares of stock not traded through the local stock exchange 150,000
Dividend received from a domestic corporation 40,000
Tax payments, first three (3) quarters 100,000
Question 1 - How much is the taxable net income in the Philippines? P905,000
Resident citizen-Itemized
Item Amount
Salary. Philippines 60,000
Less: BPE 50,000
APE 100,000
Taxable compensation income (A) (90,000)
Gross business income, Philippines 500,000

Business expense Phil (180,000)
Gross business income, USA 900,000
Business Expense, USA (300,000)
Interest income bank deposit USA 70,000
Prize (Less than 10,000) 5,000
Total (B) 995,000
Taxable income (A+B) 905,000
2 - How much is the tax payable after deducting the allowable tax credits and payments?
905,000
-500,000 Tax is P125,000
405,000
X 32% 129,600
P 254,600 Income Tax Due
- 100,000 Tax Credits
- 5,000 Withholding tax on salary
P 149,600 Income tax payable
3 – How much is the total final tax on certain passive income?

Interest from peso bank deposit 50,000
Tax rate 20%
Final tax 10,000
Interest income from a depositary bank 80,000

Tax rate 7.5%
Final tax 6,000
Royalties on books 100,000

Tax rate 10%
Final tax 10,000
Dividend received from a domestic corp 40,000

Tax rate 10%
Final tax 4,000
Total final taxes on passive income P 30,000
4 – How much is the capital gains tax?

Gain from sale of shares not traded thru local stock exchange P150,000
Capital gains tax using 5-10% table P10,000
A resident alien individual with three qualified dependent adopted children asked you to assist him in the preparation of his tax return for
his income in 2011. He provided you the following information:
Gross business income, Philippines (gross sales, P3,000,000) P 1,000,000
Gross business income, Japan (gross sales, P7,000,000) 5,000,000
Business expenses, Philippines 200,000
Business expenses, Japan 800,000
Philippine Charity Sweepstakes winnings 500,000
Japanese Sweepstakes winnings 400,000
Interest income, Bank of Tokyo, Japan 100,000
Interest income received from a depository bank under
Expanded Foreign Currency Deposit System (EFCDS), Philippines 300,000
Interest on peso bank deposit, Philippines 100,000
Quarterly income taxes paid 50,000
Question 1 - How much was the taxable net income?
Resident Alien -Itemized (Problem is silent in method of deduction)

Item Amount
Gross business income -Philippines 1,000,000
Business expense -Phil (200,000)
Net income 800,000
Less: BPE 50,000
APE 75,000
Net taxable income P675,000
2 – How much was the tax due after deducting the quarterly tax payments?
Net taxable income P675,000
- 500,000 Tax is P125,000
175,000
X 32% Tax is 56,000
P181,000 Income tax due
-100,000 Quarterly payments
81,000 tax due after quarterly payments(Tax payable)
3 – How much was the final tax on passive income?

Interest income received from a depository bank under EFCDS P300,000
Tax rate X 7.5%
Final tax P 22,500
Interest on peso bank deposit, Philippines 100,000

Tax rate 20%
Final tax P20,000
Total final taxes P42,500
4 – How much was the taxable net income using optional standard deduction?

Answer Key Handouts

Uploaded by

Copyright:

Available Formats

Answer Key Handouts

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Answer Key Handouts

Uploaded by

Copyright:

Available Formats

5.

Gross Professional Income 1,500,000

Taxable Net income (A+B) P1,625,000 P1,400,000

Gross professional income P1,500,000

Taxable net income 1,740,000 1,395,000

Question 1 - How much is the capital gains tax?

C. Zero- Listed Corporation

2 - How much is the basis of the new principal residence?

F. 1 - How much is the capital gains tax?

2 - How much is the basis of the new principal residence?

Tax Rates for Special Aliens and their Filipino Counterparts

Gross business income, Philippines 500,000

Taxable income (A+B) 905,000

3 – How much is the total final tax on certain passive income?

Interest income from a depositary bank 80,000

Royalties on books 100,000

Dividend received from a domestic corp 40,000

Total final taxes on passive income P 30,000

4 – How much is the capital gains tax?

Resident Alien -Itemized (Problem is silent in method of deduction)

3 – How much was the final tax on passive income?

Interest on peso bank deposit, Philippines 100,000

Total final taxes P42,500

You might also like