1/6/2021 Pre-Final Exam in Income Taxation

Pre-Final Exam in Income Taxation



Points: 80/120

1. Accumulated vacation and sick leave credits for government employees

converted into cash at the end of employment contract. *
(2/2 Points)

Taxable

Not Taxable 

Cannot be determined


2. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Interest from US dollar bank deposit, BPI-Makati *

(0/2 Points)

6%

8%

10%

15% 

20%

25%

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30%

Other Applicable Rates

3. Cancellation of debt in lieu to services rendered. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined


4. Cost of Living Allowance. *
(0/2 Points)

Taxable 

Not Taxable

Cannot be determined

5. Identify the applicable rate for each item. Taxpayer is DOMESTIC

CORPORATION unless otherwise stated.

Gain from sale of real property classified as capital asset *

(2/2 Points)

6% 

8%

10%

15%

20%

25%

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1/6/2021 Pre-Final Exam in Income Taxation

30%

Other Applicable Rates

6. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Prize amounting to P30,000, Philippines *

(2/2 Points)

6%

8%

10%

15%

20% 

25%

30%

Other Applicable Rates


7. Mr. Allan Cruz received the following:

Return of his life insurance premium paid for 25 years

With annual premium of P15,000 ----------------------------- P2,000,000
Proceeds his mother’s life insurance, paid premium for
30 years with annual premium of P5,000 ------------------------- P1,000,000
Cash gift from his missionary friend ------------------------------ 50,000
House and lot inherited from his mother ------------------------- 3,000,000
Rent income from house and lot inherited ------------------------ 100,000

Compute for the amount to be included from gross income. *

(0/4 Points)

100,000

Correct answers: 1,750,000

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1/6/2021 Pre-Final Exam in Income Taxation

8. Identify the applicable rate for each item. Taxpayer is DOMESTIC

CORPORATION unless otherwise stated.

Interest income from long-term deposit or investment evidenced by certificates

issued by BSP received by NON-RESIDENT FOREIGN CORPORATION *
(2/2 Points)

6%

8%

10%

15%

20%

25%

30% 

Other Applicable Rates

9. Magsaysay awards. *
(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

10. The following earnings were realized from investment in 5 year government
bonds:
Interest Income P60,000
Gain from sale of bonds classified as capital asset 140,000

How much is the total taxable income?

(Answer must be with comma) Example, 1,000 *
(5/5 Points)

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1/6/2021 Pre-Final Exam in Income Taxation

200,000 

11. Novel prize received for achievement civic achievements. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

12. Union due Contribution. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

13. Income derived from smuggling. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

14. Ms. Cat received cash amounting to P1,000,000 plus a house and lot amounting
to P3,000,000 for winning as Miss International.
How much is tax exempt from the awards of Miss Cat? *
(3/3 Points)

0 

250,000

1,000,000
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1/6/2021 Pre-Final Exam in Income Taxation

19. Pensions, in general. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

20. Identify the applicable rate for each item. Taxpayer is DOMESTIC
CORPORATION unless otherwise stated.

Interest received from depository bank under expanded foreign currency

deposit *
(2/2 Points)

6%

8%

10%

15% 

20%

25%

30%

Other Applicable Rates

21. Professional athlete’s salary. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

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1/6/2021 Pre-Final Exam in Income Taxation

22. Proceeds from the sale of land (capital asset) P100.000: costs P120,000 *
(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

23. Mandatory retirement pay *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

24. Hazard pay received by MWE. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

25. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Interest from peso bank deposit, Equitable-PCIB, Makati *

(2/2 Points)

6%

8%

10%

15%

20% 
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1/6/2021 Pre-Final Exam in Income Taxation

25%

30%

Other Applicable Rates

26. Annual clothing allowance of P4,000.00 *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

27. Onyok Velasco, a national athlete, received the following during the year:

Ramon Magsaysay award P50,000

Athlete of the year award 100,000
Prize – Jolibee raffle 5,000
Prize for winning the silver Olympic medal 500,000
Cash award from Mr. Alfred Lim 250,000
Car from Nissan as a Gift 1,000,000
Winnings – Philippine sweepstake 100,000
Gambling winning 500,000

How much is the the total winnings/awards and prizes subject to income tax?
(Answer must be with comma) Example, 1,000 *
(5/5 Points)

605,000 

28. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Prize amounting to P10,000, Philippines *

(2/2 Points)

6%

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1/6/2021 Pre-Final Exam in Income Taxation

8%

10%

15%

20%

25%

30%

Other Applicable Rates 


29. Mr. Allan Cruz received the following:

Return of his life insurance premium paid for 25 years

With annual premium of P15,000 ----------------------------- P2,000,000
Proceeds his mother’s life insurance, paid premium for
30 years with annual premium of P5,000 ------------------------- P1,000,000
Cash gift from his missionary friend ------------------------------ 50,000
House and lot inherited from his mother ------------------------- 3,000,000
Rent income from house and lot inherited ------------------------ 100,000

Compute for the amount to be excluded from gross income. *

(0/4 Points)

6,050,000

Correct answers: 4,425,000


30. World Bank’s income earned in the Philippines. *
(0/2 Points)

Taxable

Not Taxable 

Cannot be determined

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1/6/2021 Pre-Final Exam in Income Taxation

31. Income of PAGCOR. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined


32. Gains from redemption of shares in mutual fund. *
(0/2 Points)

Taxable

Not Taxable 

Cannot be determined

33. Onyok Velasco, a national athlete, received the following during the year:

Ramon Magsaysay award P50,000

Athlete of the year award 100,000
Prize – Jolibee raffle 5,000
Prize for winning the silver Olympic medal 500,000
Cash award from Mr. Alfred Lim 250,000
Car from Nissan as a Gift 1,000,000
Winnings – Philippine sweepstake 100,000
Gambling winning 500,000

How much is the the total winnings/awards and prizes not subject to income
tax?
(Answer must be with comma) Example, 1,000 *
(5/5 Points)

1,900,000 

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1/6/2021 Pre-Final Exam in Income Taxation

34. Shares of stock received due to professional service rendered. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

35. GSIS Retirement benefits. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined


36. Dividend income derived in the Philippines by the Taiwan Government. *
(0/2 Points)

Taxable

Not Taxable 

Cannot be determined


37. After two years from the death of her husband, Ina Yuan received the proceeds
of life insurance of her husband amounting to P1,254,400 including 12%
compounded interest per year. How much is the taxable amount? *
(0/3 Points)

254,400 

1,000,000

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1/6/2021 Pre-Final Exam in Income Taxation

1,254,000

Answer not given

38. Income of government from holders of public utility franchise. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined


39. Mrs. CP was insured under an endowment policy with value of P500,000. Total
premiums paid by her for life insurance policy was P490,000 from which there
was a return of premiums of P40,000. At the maturity of the policy, Mrs. CP
received P500,000. The income of Mrs CP under the policy is ____ *
(0/3 Points)

10,000

40,000

50,000 

490,000

500,000


40. Mr. Suave was injured in a vehicular accident in 200B. He incurred and paid
medical expenses of P20,000 and legal fees of P10,000 during the year. In 200C,
he received P70,000 as settlement from the insurance company which insured
the car owned by the other party involved in the accident. From the above
payments and transactions, what is the amount of taxable income accruing to
Mr. Suave in 200C? *
(0/3 Points)

0 
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1/6/2021 Pre-Final Exam in Income Taxation

30,000

40,000

70,000

41. Cash surrender value received from insurance in excess of premium paid. *
(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

42. Winnings from Philippine Sweepstakes or Lotto. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined

43. Interest income. *

(2/2 Points)

Taxable 

Not Taxable

Cannot be determined


44. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Prize amounting to P40,000, USA *

(0/2 Points)
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1/6/2021 Pre-Final Exam in Income Taxation

6%

8%

10%

15%

20%

25%

30%

Other Applicable Rates 


45. Mr. Jose Velasco received the following items for the taxable year 200x

Winning from charity horse race sweepstakes from PCSO ------------- P500,000
Winnings from gambling, net of P700,000 loss from gambling -------- 800,000
Interest on government debt securities ---------------------------------- 100,000
Damages awarded by the court for breach of contract
(of which 40% is damages for unrealized profits) ------------------------
1,000,000
Gains from redemption of shares in mutual fund ------------------------ 300,000
Gain from sale of bonds with maturity of more than five years --------- 60,000
Gifts from friends -----------------------------------------------------------
200,000

Required compute the total amount of exclusion from gross income *

(0/5 Points)

1,200,000

Correct answers: 560,000

46. Prizes and awards in sports competition, not sanctioned by their respective
national association accredited by POSC. *
(2/2 Points)

Taxable 

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Not Taxable

Cannot be determined


47. Proceeds from life insurance of a deceased employee received by the employer.
*
(0/2 Points)

Taxable 

Not Taxable

Cannot be determined

48. Gains from the sale of bond with a maturity of four years. *
(2/2 Points)

Taxable 

Not Taxable

Cannot be determined


49. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Royalties on books sold on e-copies or CDs such as e-books Philippines *

(0/2 Points)

6%

8%

10%

15%

20% 

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1/6/2021 Pre-Final Exam in Income Taxation

25%

30%

Other Applicable Rates

50. Proceeds of from life insurance policy, revocable designation of beneficiary. *

(2/2 Points)

Taxable

Not Taxable 

Cannot be determined

51. Identify the applicable rate for each item. Taxpayer is RESIDENT CITIZEN unless
otherwise stated.

Royalties, books published in Manila *

(2/2 Points)

6%

8%

10% 

15%

20%

25%

30%

Other Applicable Rates

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1/6/2021 Pre-Final Exam in Income Taxation

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