TAX1-PROBLEMS 1

INCOME TAXATION
PROBLEM 1

Mr. A had the following During the year:

Rental Income of 10 door apartment house

1800000

Expenses Collected with the apartment houses

1000000

Compensation Income (net of payroll deduction)

400000

Other Income:
Bank interest income net

8000

Prizes from :
Supermarket

10000

Rustans

20000

Dividend from:
Domestic Corporation
Foreign Corporation

9000
10000

If the apartment house is a conjugal property, determine the taxable income.

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 2
INCOME TAXATION
PROBLEM 2

A received the following from his employer:

Salaries (net of payroll deductions)

200000

Payroll deductions are as follows:

Creditable withholding tax
SSS Premium
SSS Loan
Pag-ibig Premium
Pag-ibig Loan
Philhealth
Union dues
Premium on HHI

30000
8000
10000
7000
10000
6000
5000
3000

Other Transactions
Sale of Old Refrigerator
Cost of old refrigerator

1000
3000
.

Sale of old newspaper

Cost of old newspaper
Sale of his wedding ring
Cost of wedding ring

200
500
3000
1000

The refrigerator, newspaper and wedding ring were acquired 5 yrs ago
If A is married but his wife died last year and they have 6 legitimate children (eldest is 3
years old) but 3 died last year 2015 and 2 died in 2016. How much is his taxable income if
the income above is realized in 2016?

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 3
INCOME TAXATION

PROBLEM 3

Mr. A received the following during the

year
Compensation for services rendered (net of
payroll deductions)
Payroll deductions:
Creditable Withholding Tax
SSS premium and Contribution
SSS Loan
Pag-ibig Loan
Philhealth premium
Premium on HHI

160000

16000
8000
10000
6000
4000
4000

Other Transactions:
Prizes received during the year
Best Athlete- SEA Games
Raffle draws-SM Philippines
USA-Supermarket

10000
10000
20000

Dividend from:
Domestic Corporation
Foreign Corporation

9000
10000

Sales of Shares through Stock Exchange

Selling Price
Acquisition Cost

10000
12000

Selling Price of ABC Corporation directly to

buyer
Cost

12000

Selling price of necklace

Acquisition cost 4 years ago

10000
6000

Selling price of earrings

acquisition cost 10 months ago

10000
11000

In addition to compensation income he

received 13 th month pay

12000

8000

A is single, supporting his parents and two illegitimate children and the mother of his
illegitimate children. How much is his taxable income?
ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 4
INCOME TAXATION

PROBLEM 4

Mr. A received the following during the calendar year 2015

Salary Gross
Overtime Pay
Night-shift differential pay
Holiday Pay
Hazard Pay
Rice Subsidy
Uniform Allowance
Laundry Allowance
Medical Benefits
Christmas Cash Gift
Productivity Bonus out of CBA
13th Month pay
Christmas Bonus
Productivity Bonus as a gift for length of service
Monetization of Gift Credits for 15 days
Additional Rice Subsidy by virtue of CBA
Additional Uniform allowance
Additional Laundry allowance
Deductions from his income:
SSS Premiums
Philhealth
Pag-ibig
Union dues
Premium on HHI
Payable to canteen concession for food he ate in the office
Winnings from:
Gambling
PCSO
Lotto Draw

200000
1000
2000
3000
4000
1600 a month
6000 for the year
4000 a year
12000 a year
10000
15000
20000
20000
20000
20000
1000 a month
6000
4000
8000
7000
6000
5000
4000
2000

5000
10000
20000

If A is married not supporting his wife, his mother, his father and the
other children of his parents (5) living and dependent (all minor) on A.
Determine the taxable income.

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 5
INCOME TAXATION
PROBLEM 5

A has (2 )sources of income from business and from employment. He recieved the following
from his employer:
Salary (net of payroll deduction)

220000

He received the following from his employer:

Rice Allowance
Uniform Allowance
Medical Allowance
Cash Achievement Award
Christmas Cash gift
13th month pay
Christmas Bonus
Productivity Bonus
Monetary leave credits of 15 days
Payroll Deductions:
Withholding tax
SSS loan
SSS premium
Pag-ibig Premium
Philhealth Premium
Union dues
Premium on HHI
Income from his business
Sari-sari Store
Cost of Sales
Rent Expense for the year
Depreciation Expense
Salary of his employees/helper
Taxes and licenses
Light, water, and utilities

2000 a month
10000 a year
15000
10000
10000
20000
20000
20000
18000

20000
10000
10000
10000
6000
8000
4000

240000
120000
24000
6000
40000
2000
2000

If A is single with 5 illegitimate children (eldest is 2 years old) dependent on him.

Determine the taxable income of A.

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 6
INCOME TAXATION
PROBLEM 6

A, resident citizen had the following transaction:

1) Selling price of a necklace
Acquisition cost 30 years ago
terms of the sale:
Downpayment today
Installment payment every 3 months thereafter until fully paid
Unpaid mortgage of necklace assumed by buyer
2) Sale of an idle residential land
Acquisition cost 40 years ago
terms of the sale:
Downpayment today
Installment every 3 months thereafter until fully paid
Unpaid mortgage of land which will be assumed by the buyer

1000000
200000
100000
100000
300000
10000000
2000000
1000000
1000000
3000000

3) Sale of a diamond ring acquired 30 years ago

Selling Price
Acquisition cost
terms of the sale:
Downpayment
Installment every 6 months until fully paid
Unpaid mortgage of diamond ring to be assumed by the buyer
4) Idle commercial land
Acquisition cost 40 yrs ago
terms of the sale:
Downpayment
Installment every 6 months thereafter
Unpaid mortgage of idele land assumed by the buyer

1000000
200000
100000
50000
300000
10000000
2000000

1000000
500000
3000000

Required
1) Income to be reported on the sale of necklace
2) Capital gains of idle land
3) income to be reported for sale of ring
4) Capital gains for sale of commercial land

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 7
INCOME TAXATION
PROBLEM 7

Mr. A sold the following:

Capital Assets acquired 40 years ago
Selling price of bracelet
Idle residential land

1000000
10000000

Terms of the sale:

Downpayment today
bracelet
land

100000
1000000

Installment payment every 6 months thereafter

bracelet
land

50000
1000000

Mortgaged assumed by the buyer

bracelet
land

100000
1000000

Acquisition cost
bracelet
land

200000
2000000

Required
(1) Determine the income to be reported in 2016
(2) Capital gains tax to be paid in 2016

ROZELE VICTORIA Y. DONES

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TAX1-PROBLEMS 8
INCOME TAXATION
PROBLEM 8

A had the following:

Net Sales
Cost of Sales
Expenses incurred:
Interest expense
Salaries, wages and benefits
Rent expense
Depreciation
Entertainment Amusement and Recreation
Taxes and licenses including utilities
Bad Debt expense whether receivable written off
Contributions made to the Department of Public Highways
Contribution to the government
Contribution to religious and charitable
Losses due to typhoons and earthquake which hit the place not
compensated by insurance

5000000
3000000

50000
500000
200000
20000
40000
30000
50000
100000
100000
100000
800000

Determine the taxable income of A if he is single.

ROZELE VICTORIA Y. DONES

Page 8

TAX1-PROBLEMS 9
INCOME TAXATION
PROBLEM 9

Mr. A had the following during the year:

Gross Income (60% of Sales)
Salary of his employees (3)

3000000
10000 a month for
360000

*one is a senior citizen

*other one is a person with disability
Rent Expense
Utilities expense-light, water, telecom
Supplies expense
Depreciation expense
Entertainment, Amusement and Recreational expense
Taxes and licenses
13th month pay to employees
Fringe benefits given to employees
Contributions to government- public use
Contributions to DepED for construction of classroom-priority
activity
Contribution to religious and charitable not more than 30% used
for admin purposes

240000
18000
2000
3000
80000
4000
30000
120000
100000
1000000
100000

If Mr. A is married with 10 legitimate children the eldest is 4 years old. Determine the
taxable income

ROZELE VICTORIA Y. DONES

Page 9