Tax2 Midterm Exam
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DONOR’S TAX MULTIPLE CHOISE QUESTIONS 1. An act of liberty whereby one disposes gratuitous of a thing or right in favor of another who accepts it- a. Succession c. Donation b. Occupation d. Tradition 2. A tax imposed on the gratuitous transfer of property between two or more person who are living at the time the transfer is made a. Estate tax c. Income tax b. Gift tax d. Transfer tax 3. A donation made by a stockholder to a corporation is subject to donor’s tax because of the following principles, except a. Entity theory c. Benefit received principle b. Lifeblood theory d. Tax benefit rule 4. What is the tax implication if a corporation condones the debt of a stockholder because of a good thing done by the latter to the corporation? a. The condonation is based on the liberality of the corporation; therefore, it is subject to donor’s tax. b. The condonation is subject to donor’s tax on the corporation because it is based on its liberality. Moreover, it is equivalent to a payment of dividend to the stockholder which is, therefore, subject to a dividend tax of 10%. c. It is tantamount to a declaration of dividend. Therefore, it is an income which is subject to 10% dividend tax on the stockholder. However, it is not subject to donor’s tax on the corporation. d. It is just a simple case of extinguishment of an obligation which is neither subject to income tax on the stockholder not subject to donor’s tax on the corporation. 5. ABDON went to ALAMBRA RESORT and was given a prize of P50, 000.00 by the resort for being its 1,000 th guest. Is the prize subject to donor’s tax? Income Tax? Donors Tax Income tax a. Yes Yes b. No Yes
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Transcript of Tax2 Midterm Exam
DONORS TAX MULTIPLE CHOISE QUESTIONS1. An act of libet! "#eeb! one $i%&o%e% 'at(ito(% of a t#in' o i'#t in fa)oof anot#e "#o acce&t% it*a. S(cce%%ion c. Donationb. Occ(&ation $. Ta$ition+. A ta, i-&o%e$ on t#e 'at(ito(% tan%fe of &o&et! bet"een t"o o -oe&e%on "#o ae li)in' at t#e ti-e t#e tan%fe i% -a$ea. E%tate ta, c. Inco-e ta,b. .ift ta, $. Tan%fe ta,/. A $onation -a$e b! a %toc0#ol$e to a co&oation i% %(b1ect to $ono% ta,beca(%e of t#e follo"in' &inci&le%2 e,ce&ta. Entit! t#eo! c.3ene4t ecei)e$ &inci&leb. Lifebloo$ t#eo! $.Ta, bene4t (le5. 6#at i% t#e ta, i-&lication if a co&oation con$one% t#e $ebt of a%toc0#ol$e beca(%e of a 'oo$ t#in' $one b! t#e latte to t#e co&oation7a. T#e con$onation i% ba%e$ on t#e libealit! of t#e co&oation8 t#eefoe2 iti% %(b1ect to $ono% ta,.b. T#e con$onation i% %(b1ect to $ono% ta, on t#e co&oation beca(%e it i%ba%e$ on it% libealit!.Moeo)e2 it i% e9(i)alent to a &a!-ent of $i)i$en$to t#e %toc0#ol$e "#ic# i%2 t#eefoe2 %(b1ect to a $i)i$en$ ta, of 1:;.c. It i% tanta-o(nt to a $eclaation of $i)i$en$. T#eefoe2 it i% an inco-e"#ic# i% %(b1ect to 1:; $i)i$en$ ta, on t#e %toc0#ol$e. Ho"e)e2 it i%not %(b1ect to $ono% ta, on t#e co&oation.$. It i% 1(%t a %i-&le ca%e of e,tin'(i%#-ent of an obli'ation "#ic# i% neit#e%(b1ect to inco-e ta, on t#e %toc0#ol$e not %(b1ect to $ono% ta, on t#eco&oation.NCo&oation. T#e$onoo"n%C:; of t#e o(t%tan$in' ca&ital%toc0 of t#e $one*co&oation. T#e $ono%ta, $(e to t#e $onation i%*a. P152::: c.P5:2:::b. P1
