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TAXATION QUIZZER PART 1
BASIC PRINCIPLES OF TAXATION
1. Which theory in taxation states that without taxes, a government would be
paralyzed for lack of power to activate and operate it, resulting in its
destruction?
a. Power to destroy theory
b. Lifeblood theory
c. Sumptuary theory
d. Symbiotic doctrine
2. The actual effort exerted by the government to effect the exaction of what is
due from the taxpayer is known as
a. Assessment.
b. Levy.
c. Payment.
d. Collection.
3. Although the power of taxation is basically legislative in character, it is NOT
the function of Congress to
a. Fix with certainty the amount of taxes.
b. Collect the tax levied under the law.
c. Identify who should collect the tax.
d. Determine who should be subject to the tax.
4. An example of a tax where the concept of progressivity finds application is the
a. Income tax on individuals.
b. Excise tax on petroleum products.
c. Value-added tax on certain articles.
d. Amusement tax on boxing exhibitions.
5. Ligaya Educational Foundation, Inc., a stock educational institution organized
for profit, decided to lease for commercial use a 1,500 sq. m. portion of its
school. The school actually, directly, and exclusively use the rents for the
maintenance of its school buildings, including payment of janitorial services. Is
the leased portion subject to real property tax?
a. Yes, since Lualhati is a stock and for profit educational institution.
b. No, since the school actually, directly, and exclusively used the rents
for educational purposes.
c. No, but it may be subject to income taxation on the rents it receives.
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d. Yes, since the leased portion is not actually, directly, and
exclusively used for educational purposes.
6. Which among the following concepts of taxation is the basis for the situs of
income taxation?
a. Lifeblood doctrine of taxation
b. Symbiotic relation in taxation
c. Compensatory purpose of taxation
d. Sumptuary purpose of taxation
DONOR’S TAX
7. Which of the following transactions is deemed a taxable gift?
a. Condonation or remission of a debt
b. Sale of residential house and lot for less than adequate and full
consideration in money or money’s worth
c. Both (a) and (b)
d. Neither (a) nor (b)
8. Which of the following statements relative to donor’s tax is false?
a. The spouses shall file separate donor’s tax returns where the thing
donated is common property.
b. Each parent shall be entitled to the P10,000 exemption on account of
marriage of a child.
c. Exemptions and deductions cannot be claimed where the 30%
tax rate on stranger is applicable.
d. None of the foregoing.
9. The spouses Esme and Carlisle wanted to donate a parcel of land to their son
Edward who is getting married in December, 2016. The parcel of land has a
zonal valuation of P420,000.00. What is the most efficient mode of donating
the property?
a. The spouses should first donate in 2016 a portion of the property
valued at P20,000, then spread the P400,000 equally for 2017, 2018,
2019 and 2020.
b. Spread the donation over a period of 5 years by the spouses donating
P100,000 each year from 2016 to 2020.
c. The spouses should each donate a P110,000 portion of the
value of the property in 2016 then each should donate
P100,000 in 2017.
d. The spouses should each donate a P100,000 portion of the value of the
property in 2016, and another P100,000 each in 2017. Then, in 2018,
Esme should donate the remaining P20,000.
10. Exempted from donor’s taxation are gifts made
a. For the use of the barangay.
b. In consideration of marriage.
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c. To a school which is a stock corporation.
d. To a for-profit government corporation.
11. Caroline donated P110,000.00 to her friend Vicky who was getting married.
Caroline gave no other gift during the calendar year. What is the donor's tax
implication on Caroline’s donation?
a. The P100,000 portion of the donation is exempt since given in
consideration of marriage.
b. A P10,000 portion of the donation is exempt being a donation in
consideration of marriage.
c. Caroline shall pay a 30% donor's tax on the P110,000 donation.
d. The P100,000.00 portion of the donation is exempt under the rate
schedule for donor's tax.
12. A non-stock, non-profit school always had cash flow problems, resulting in
failure to recruit well-trained administrative personnel to effectively manage
the school. In 2017, Don Leon donated P100 million pesos to the school,
provided the money shall be used solely for paying the salaries, wages, and
benefits of administrative personnel. The donation represents less than 10% of
Don Leon's taxable income for the year. Is he subject to donor's taxes?
a. No, since the donation is actually, directly, and exclusively used for
educational purposes.
b. Yes, because the donation is to be wholly used for
administration purposes.
c. Yes, since he did not obtain the requisite NGO certification before he
made the donation.
d. No, because the donation does not exceed 10% of his taxable income
for 2017.
13. What law shall govern the imposition of donor’s tax?
a. The law in force at the time of perfection of the donation
b. The law in force at the time of completion of the donation
c. The law in force at the time of perfection or completion depending upon
the agreement of the parties
d. None of the choices
14. Andy, married, donated a land commonly owned by him and her spouse worth
P500,000 to her friend Joan. Only Andy signed the deed of donation. Joan
assumed P200,000 unpaid mortgage on the property.
How much is the donor’s tax due?
a. P6,000 c. P1,000
b. P90,000 d. P45,000
500k - 200k = 300k x 30% = 90,000
15. Dondie, resident citizen, made the following donations on April 28 of the
current year:
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To his sister, Donna,P175,000 worth of property situated in Paris, France. The
donor’s tax paid is P40,000.
To Dara, his girlfriend in the Philippines, jewelry valued at P225,000.
To International Rice Research Institute, cash amounting to P50,000.
The donor’s tax due after tax credit is –
a. P69,000 c. P29,000
b. P38,813 d. P5,625 225,000 x 30% =
67,500 + (175,000 - 100,000 x 2% Tabular) = 69,000 -
(69,000 x 175k/400k) = 38,813
ESTATE TAX
16. Which of the following is not a part of the gross estate?
a. Conjugal property
b. Community property
c. Exclusive property of the decedent
d. Exclusive property of the surviving spouse
17. Who among the following transferors is not liable for estate tax on the property
transferred during his lifetime?
a. The testator who bequeaths property to his heirs in a last will and
testament executed and probated during his lifetime
b. The donor who reserves his right to amend or revoke the donation of
property in favor of the donee
c. The donee of an appointed property who is required under a
power of appointment to transfer such property upon death to
his eldest child
d. The transferor of personal property who sold it for insufficient
consideration
18. Which of the following properties of the spouses will be part of common
properties under a regime of Conjugal Partnership of Gains?
a. Land inherited during the marriage
b. Fruits of land inherited
c. Jewelry inherited during the marriage
d. Building donated before marriage
19. Which of the following items is not considered as a “special deduction” in
computing the taxable net estate of the decedent?
a. Vanishing deduction
b. Medical expenses
c. Standard deduction
d. Family home allowance
20. When the payment of estate tax will cause undue hardship upon the heirs or
the estate which is undergoing judicial settlement before the court, the BIR
Commissioner may grant an extension for a period not exceeding:
a. 5 years
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TAXATION QUIZZER PART 1
BASIC PRINCIPLES OF TAXATION
1. Which theory in taxation states that without taxes, a government would be
paralyzed for lack of power to activate and operate it, resulting in its
destruction?
a. Power to destroy theory
b. Lifeblood theory
c. Sumptuary theory
d. Symbiotic doctrine
2. The actual effort exerted by the government to effect the exaction of what is
due from the taxpayer is known as
a. Assessment.
b. Levy.
c. Payment.
d. Collection.
3. Although the power of taxation is basically legislative in character, it is NOT
the function of Congress to
a. Fix with certainty the amount of taxes.
b. Collect the tax levied under the law.
c. Identify who should collect the tax.
d. Determine who should be subject to the tax.
4. An example of a tax where the concept of progressivity finds application is the
a. Income tax on individuals.
b. Excise tax on petroleum products.
c. Value-added tax on certain articles.
d. Amusement tax on boxing exhibitions.
5. Ligaya Educational Foundation, Inc., a stock educational institution organized
for profit, decided to lease for commercial use a 1,500 sq. m. portion of its
school. The school actually, directly, and exclusively use the rents for the
maintenance of its school buildings, including payment of janitorial services. Is
the leased portion subject to real property tax?
a. Yes, since Lualhati is a stock and for profit educational institution.
b. No, since the school actually, directly, and exclusively used the rents
for educational purposes.
c. No, but it may be subject to income taxation on the rents it receives.
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d. Yes, since the leased portion is not actually, directly, and
exclusively used for educational purposes.
6. Which among the following concepts of taxation is the basis for the situs of
income taxation?
a. Lifeblood doctrine of taxation
b. Symbiotic relation in taxation
c. Compensatory purpose of taxation
d. Sumptuary purpose of taxation
DONOR’S TAX
7. Which of the following transactions is deemed a taxable gift?
a. Condonation or remission of a debt
b. Sale of residential house and lot for less than adequate and full
consideration in money or money’s worth
c. Both (a) and (b)
d. Neither (a) nor (b)
8. Which of the following statements relative to donor’s tax is false?
a. The spouses shall file separate donor’s tax returns where the thing
donated is common property.
b. Each parent shall be entitled to the P10,000 exemption on account of
marriage of a child.
c. Exemptions and deductions cannot be claimed where the 30%
tax rate on stranger is applicable.
d. None of the foregoing.
9. The spouses Esme and Carlisle wanted to donate a parcel of land to their son
Edward who is getting married in December, 2016. The parcel of land has a
zonal valuation of P420,000.00. What is the most efficient mode of donating
the property?
a. The spouses should first donate in 2016 a portion of the property
valued at P20,000, then spread the P400,000 equally for 2017, 2018,
2019 and 2020.
b. Spread the donation over a period of 5 years by the spouses donating
P100,000 each year from 2016 to 2020.
c. The spouses should each donate a P110,000 portion of the
value of the property in 2016 then each should donate
P100,000 in 2017.
d. The spouses should each donate a P100,000 portion of the value of the
property in 2016, and another P100,000 each in 2017. Then, in 2018,
Esme should donate the remaining P20,000.
10. Exempted from donor’s taxation are gifts made
a. For the use of the barangay.
b. In consideration of marriage.
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c. To a school which is a stock corporation.
d. To a for-profit government corporation.
11. Caroline donated P110,000.00 to her friend Vicky who was getting married.
Caroline gave no other gift during the calendar year. What is the donor's tax
implication on Caroline’s donation?
a. The P100,000 portion of the donation is exempt since given in
consideration of marriage.
b. A P10,000 portion of the donation is exempt being a donation in
consideration of marriage.
c. Caroline shall pay a 30% donor's tax on the P110,000 donation.
d. The P100,000.00 portion of the donation is exempt under the rate
schedule for donor's tax.
12. A non-stock, non-profit school always had cash flow problems, resulting in
failure to recruit well-trained administrative personnel to effectively manage
the school. In 2017, Don Leon donated P100 million pesos to the school,
provided the money shall be used solely for paying the salaries, wages, and
benefits of administrative personnel. The donation represents less than 10% of
Don Leon's taxable income for the year. Is he subject to donor's taxes?
a. No, since the donation is actually, directly, and exclusively used for
educational purposes.
b. Yes, because the donation is to be wholly used for
administration purposes.
c. Yes, since he did not obtain the requisite NGO certification before he
made the donation.
d. No, because the donation does not exceed 10% of his taxable income
for 2017.
13. What law shall govern the imposition of donor’s tax?
a. The law in force at the time of perfection of the donation
b. The law in force at the time of completion of the donation
c. The law in force at the time of perfection or completion depending upon
the agreement of the parties
d. None of the choices
14. Andy, married, donated a land commonly owned by him and her spouse worth
P500,000 to her friend Joan. Only Andy signed the deed of donation. Joan
assumed P200,000 unpaid mortgage on the property.
How much is the donor’s tax due?
a. P6,000 c. P1,000
b. P90,000 d. P45,000
500k - 200k = 300k x 30% = 90,000
15. Dondie, resident citizen, made the following donations on April 28 of the
current year:
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To his sister, Donna,P175,000 worth of property situated in Paris, France. The
donor’s tax paid is P40,000.
To Dara, his girlfriend in the Philippines, jewelry valued at P225,000.
To International Rice Research Institute, cash amounting to P50,000.
The donor’s tax due after tax credit is –
a. P69,000 c. P29,000
b. P38,813 d. P5,625 225,000 x 30% =
67,500 + (175,000 - 100,000 x 2% Tabular) = 69,000 -
(69,000 x 175k/400k) = 38,813
ESTATE TAX
16. Which of the following is not a part of the gross estate?
a. Conjugal property
b. Community property
c. Exclusive property of the decedent
d. Exclusive property of the surviving spouse
17. Who among the following transferors is not liable for estate tax on the property
transferred during his lifetime?
a. The testator who bequeaths property to his heirs in a last will and
testament executed and probated during his lifetime
b. The donor who reserves his right to amend or revoke the donation of
property in favor of the donee
c. The donee of an appointed property who is required under a
power of appointment to transfer such property upon death to
his eldest child
d. The transferor of personal property who sold it for insufficient
consideration
18. Which of the following properties of the spouses will be part of common
properties under a regime of Conjugal Partnership of Gains?
a. Land inherited during the marriage
b. Fruits of land inherited
c. Jewelry inherited during the marriage
d. Building donated before marriage
19. Which of the following items is not considered as a “special deduction” in
computing the taxable net estate of the decedent?
a. Vanishing deduction
b. Medical expenses
c. Standard deduction
d. Family home allowance
20. When the payment of estate tax will cause undue hardship upon the heirs or
the estate which is undergoing judicial settlement before the court, the BIR
Commissioner may grant an extension for a period not exceeding:
a. 5 years
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