Transfer and business taxes by ampongan 6th sol man 13

EXERCISE 13–1 WORD SEARCH Thirty Net gift DSWD PCNC IBP T A E U L A V R A P H T E D L G R A T E I F I L L E B O O K R I C E I B P A K I T G D O W R Y C A L Y T E S A O W S N O F E L E W D T L O C I N G N A D K T S T W E L L A S A G E O T R U E C O P Y S N EXERCISES 13-2 The Revenue District Officer is not correct Since the donations were made in a different year, the computation of the tax on each donation must be done separately The donor has the prerogative to choose the date in which he would want to donate his properties On the assumption that the requisites for a valid donation were complied, the donor's tax due is P2,000 because the visitor is a father of Bilanggo a No because the giving of the gift check took place outside the Philippines This is evident from the fact that the check was sent and not given by Gandhi in the Philippines b The gift is taxable in the Philippines because there is no reciprocity between Philippines and India 45 c No Nonresident aliens are not allowed to claim the exemption of P10,000 EXERCISES 13-3 PROBLEMS a Tax on P 90,000 Exempt b Tax on P 100,000 Exempt c Tax on P 100,000 80,000 x 2% P Exempt 1,600 d Tax on P 3,000,000 P 204,000 e Tax on P 5,000,000 1,500,000 x 12% Gift tax P 404,000 180,000 584,000 f Tax on P 10,000,000 1,200,000 x 15% Gift tax P1,004,000 180,000 1,184,000 Donation – May 17, 2008 Mr Amigo To Barat (370,000 x 1/2) Barat 185,000 125,00 310,000 10,000 300,000 Gross gift Less: Exemptions Net gift Tax on P200,000 100,000 x 4% Gift tax Mrs Amigo P 185,000 10,000 175,000 P 2,000 4,000 6,000 Tax on P100,000 75,000 x 2% Exempt P 1,500 Donation – June 12, 2008 Mr Amigo Mrs Amigo To Constantino Barat (600,000/2) Gross gift Less: Deductions Unpaid mortgage (40,000/2) Unpaid taxes (8,000/2) Total deductions Net gift 300,000 300,000 20,000 4,000 24,000 276,000 Add: Net gift, May 17 Total 300,000 576,000 Tax on P 500,000 76,000 x 6% 14,000 4,560 46 100,000 300,000 400,000 20,000 4,000 24,000 376,00 175,000 551,000 Gift tax on total Less: Tax paid, May 17 Gift tax due 18,560 6,000 12,560 Tax paid on P500,000 51,000 x 6% Gift tax on total Less: Tax paid, May 17 Gift tax due 14,000 3,060 17,060 1,500 15,560 Donation – March 20, 2008 Gross gift P 300,000 - 300,00 Less: Deductions Net gift Tax on P 200,000 100,000 x 4% Gift tax due P 2,000 4,000 6,000 Donation – July 20, 2008 Gross gift P300,00 300,00 300,00 600,00 Less: Deductions Net gift Add: Net gift, March 20 Total Tax on P 500,000 100,000 x 6% Tax on total Less: Tax paid, March 20 Gift tax due P14,000 6,000 20,000 6,000 14,000 Donation – November 20, 2009 Gross gift P300,00 300,00 Less: Deductions Net gift Tax on P 200,000 100,000 x 4% Gift tax due P 2,000 4,000 6,000 Donor – Asada Donation – April 25 Gross gift P150,00 47 10,00 140,00 Less: Deductions Net gift Tax on P 100,000 40,000 x 2% Exempt P 800 Donor – Asada Donation – May Gross gift P 75,000 - 75,00 140,00 215,00 Less: Deductions/Exemptions Net gift Add: Net gift, April 25 Total Tax on P 200,000 15,000 x 4% Tax on total Less: Tax paid, April 25 Gift tax due P 2,000 600 2,600 800 1,800 Donor – Asada Donation – July 30, 2002 To Paco P400,00 75,00 475,00 Ramon Magsaysay Foundation Gross gift Less: Deductions/Exemptions To Paco Ramon Magsaysay P10,000 75,000 Net gift Tax on P 200,000 190,000 x 4% Gift tax Less: Tax paid April 25 May P 2,000 7,600 9,600 P 800 1,800 Gift tax due 85,00 390,00 2,60 7,000 March 20, 2008 Gross gift P325,000 48 Less: Exemptions Net gift 325,000 Tax on P 200,000 125,000 x 4% Gift tax P 2,000 5,000 7,000 May 20, 2008 Gross gift Less: Deductions/Exemptions Net gift Add: Net gift, March 20 Total P500,000 500,000 325,000 825,000 Tax on P 500,000 325,000 x 6% Tax on total Less: Tax paid, March 20 Gift tax due P14,000 19,500 33,500 7,000 26,500 Donation – June 5, 2008 Gross gift Rate Gift tax due P 88,000 30% 26,400 Donation – July 29, 2008 Gross gift Rate Gift tax due P 25,000 30% 7,500 Assumption A: a The rule on transfer for insufficient consideration applies only when the following requisites are present: The market value is higher that the selling price; and The property is not a real property and a capital asset Thus, even is the sale was made for an insufficient consideration no donor’s tax is due because the property subject of sale is a real property-capital asset b Market value (higher than selling price) Capital gains tax rate Capital gains tax 1,600,000 6% 96,000 Assumption B: a Fair market value Less: Selling price Deemed gift Rate of tax (stranger) Donor’s tax due 1,600,000 1,000,000 600,000 30% 180,000 b Selling price 1,000,000 49 Less: Cost Acquisition cost 400,000 Commission 50,000 Taxes and other fees 25,000 Capital gain on sale (long-term) 475,000 525,000 Income subject to tax (525,000 x 50%) 262,500 Donation – February 14 Gross gift P 700,000 700,000 Less: Exemption Net gift Tax on P 500,000 200,000 x 6% Gift tax P 14,000 12,000 26,000 Donation – July 14 Gross gift P 250,000 250,000 30% 75,000 Less: Exemptions/Deductions Net gift Rate of tax Gift tax Donation – November 14 Gross gift P 150,000 150,000 700,000 850,000 Less: Exemption/Deduction Net gift Add: Net gift, Feb 14 Total Tax on P 500,000 350,000 x 6% Gift tax Less: Tax paid, Feb 14 Gift tax due P 14,000 21,000 35,000 26,000 9,000 December 14, 2001 Gross gift P100,00 - 100,000 30% 30,000 Less: Exemptions/Deductions Net gift Rate of tax Gift tax Donor – Cabading Donation – June 50 To Cabaroray P 125,000 300,000 425,000 300,000 125,000 Philippine National Library Gross gift Less: Deductions – National Library Net gift Tax on P 100,000 25,000 x 2% Exempt P 500 Donor – Cabading Donation – July To University of the Philippines P160,00 160,00 320,00 - 320,00 125,000 445,00 Cababaero (2,000 x P80) Gross gift Less: Deductions/Exemptions Net gift Add: Net gift, June Total Tax on P200,000 245,000 x 4% Gift tax Less: Tax credit Tax paid, June Gift tax due P 2,000 9,800 11,800 500 11,300 Donor – Mr Pano Donation - April 12 To Wilda (800,000/2) P 400,000 150,000 550,000 10,000 540,000 Acuna Gross gift Less: Exemption – To Wilda Net gift Tax on P500,000 P 14,000 2,400 16,400 40,000 x 6% Gift tax Less: Tax credit Tax paid in U.S 7,000 Limit (150/540 x 16,400) 4,556 Allowed Donor’s tax due after tax credit P 4,556 11,844 51 Donor – Mrs Pano Donation – April 12, 2002 To Wilda 400,000 Tax on P200,000 200,000 x 4% Donor’s tax payable 2,000 8,000 10,000 Donor- Mr Pano Donation – September To Sigue (175,000/2) P 87,500 87,500 540,000 627,500 Less: Deductions/Exemptions Net gift Add: Net gift, April 12 Total net gift On P 500,000 P 14,000 7,650 21,650 11,844 9,806 127,500 x 6% Donor’s tax Less: Tax paid, April 12 Donor’s tax after tax credit Donor – Mrs Pano Donation – September To Sigue Add: Net gift – April 12 Total net gift 87,500 400,000 487,500 On P200,000 287,500 x 4% Tax on total Less: Tax paid Donor’s tax payable 2,000 11,500 13,500 10,000 3,500 52 ... on transfer for insufficient consideration applies only when the following requisites are present: The market value is higher that the selling price; and The property is not a real property and. .. 30% 180,000 b Selling price 1,000,000 49 Less: Cost Acquisition cost 400,000 Commission 50,000 Taxes and other fees 25,000 Capital gain on sale (long-term) 475,000 525,000 Income subject to tax...c No Nonresident aliens are not allowed to claim the exemption of P10,000 EXERCISES 13- 3 PROBLEMS a Tax on P 90,000 Exempt b Tax on P 100,000 Exempt c Tax on P 100,000 80,000 x 2%