Solution manual transfer and business taxes by valencia CHAPTER 1 INTRO TO IRT

BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS Chapter 1: INTRODUCTION TO INTERNAL REVENUE TAXES CHAPTER INTRO TO INTERNAL REVENUE TAXES Problem 1-1 True – as to the object of tax True – as a general rule, except if the merchandise is sold outside the Philippines not subject to business tax in the Philippines If the resident Filipino citizen is within the subsistence livelihood earnings, tax-exempt False – business tax is another Internal Revenue Tax distinct from income tax True False – it is the other way around True True True True 10 False – citizens, resident or nonresident are subject to transfer tax for transfers within 11 False – on the 20th of the month following the taxable month 12 True 13 False – only income earned within will be taxable against resident alien 14 False – should be at least P1,000,000 per year Problem 1-2 A A C B A B A D C 10 A 11 D 12 A 13 C Problem 1-3 D A C A C A D A C 10 C 11 D 12 D 13 A Problem 1–4 A Subject to business tax is P6,000,000 Only sales within are subject to business tax Subject to income tax: Total sales (P6,000,000 + P4,000,000) Total cost of sales (P2,000,000 + P1,500,000) Gross income Subject to transfer tax (P3,000,000 + P2,000,000) P10,000,000 ( 3,500,000) P 6,500,000 P 5,000,000 Since the donor is a citizen, all of his properties donated within and without is subject to donor’s tax B Subject to business tax is P6,000,000 Only sales within are subject to business tax BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS Chapter 1: INTRODUCTION TO INTERNAL REVENUE TAXES Subject to income tax: Sales – within Cost of sales – within Gross income P6,000,000 (2,000,000) P4,000,000 Subject to transfer tax (P3,000,000 + P2,000,000) P5,000,000 Since the donor is a citizen, all of his properties donated within and without is subject to donor’s tax Problem 1–5 B O O O O B B O T 10 T Problem 1–6 Sales Gross income Within Without Res Citizen 3,000,000 600,000 2,000,000 400,000 3,000,000 1,000,000 Taxpayer is a resident citizen a P1,000,000 = [P5,000,000 – (P5,000,000/1.25)] b P3,000,000 Taxpayer is a resident alien a P600,000 = [P3,000,000 – (P3,000,000/1.25)] b P3,000,000 Taxpayer is nonresident alien a P600,000 = [P3,000,000 – (P3,000,000/1.25)] b P3,000,000 Taxable Amount Res Alien 3,000,000 600,000 Non-Res Alien 3,000,000 600,000 Problem 1–7 P720,000 = (P600,000 x 1.2) P180,000 = (P720,000 – P600,000) + (P660,000 – P600,000) Problem 1–8 Tax returns: a BIR Form 2551 – for business tax b BIR Form 1701Q – for quarterly income tax return c BIR Form 1701 – for annual income tax return Dates of filing and payments: a On or before the 20th of each month (BIR Form 2551) b April 15, August 15, and November 15 for the first quarters and April 15 of the following year for the annual tax return .. .BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS Chapter 1: INTRODUCTION TO INTERNAL REVENUE TAXES Subject to income tax: Sales – within... Form 17 01 – for annual income tax return Dates of filing and payments: a On or before the 20th of each month (BIR Form 25 51) b April 15 , August 15 , and November 15 for the first quarters and April... 600,000 Problem 1 7 P720,000 = (P600,000 x 1. 2) P180,000 = (P720,000 – P600,000) + (P660,000 – P600,000) Problem 1 8 Tax returns: a BIR Form 25 51 – for business tax b BIR Form 17 01Q – for quarterly