I

In January 2013, your friend got his first job as an office clerk. He is single and lives with his family who depends
upon him for financial support. His parents have long retired from their work, and his two (2) siblings are still
minors and studying in grade school. In February 2014, he consulted you, as he wanted to comply with all the rules
pertaining to the preparation and filing of his income tax return. He now asks you the following:

a) Is he entitled to personal exemptions? (yes or no) __________ how much_____________

b) Is he entitled to additional exemptions?(yes or no)_________ how much?________________

II

X was hired by Y to watch over Vs fishponds with a salary of Php 10,000.00. To enable him to perform his duties
well, he was also provided a small hut, which he could use as his residence in the middle of the fishponds.

a) Who are entitled to fringe benefit subject to the fringe benefit tax ___________________________
b) Is the small hut provided for X purposely for the convenience of the employer? (yes or no) __________
c) Is the fair market value of the use of the small hut by X, a fringe benefit? (yes or no) ________

III.

a) De minimis benefits. Refer to facilities or privileges furnished or offered by an employer to his employees
that are of relatively ______________and are offered or furnished by the __________ merely as a means of
promoting _______,___________, ____________ or ____________.

b) De minimis benefits, like fringe benefits, are granted by the ________________on top of the employees
basic compensation, but are not considered as (taxable/or not) __________________compensation for
income tax purposes nor subject to the fringe benefit tax.

c) Enumerate 11 tax exempt de minimis benefits to employees.

IV

Sabado Nights Corporation gives all its employees (rank and file, supervisors and managers) one sack of rice every
month valued at P800 per sack. During an audit investigation made by the Bureau of Internal Revenue (BIR), the BIR
assessed the company for failure to withhold the corresponding withholding tax on the amount equivalent to the one
sack of rice received by all the employees, contending that the sack of rice is considered as additional compensation
for the rank and file employees and additional fringe benefit for the supervisions and managers.

a) Is there a legal basis for the assessment made by the BIR? (yes or no)___________

b) Is the value of one sack of rice every month be considered as part of the compensation of the rank and file
subject to tax? (yes or no)________

c) Is the value of one sack of rice every month be considered as part of the compensation of the supervisors
and managers subject to fringe benefit tax? (yes or no)_________

d) The one sack of rice given to the rank and file, supervisors and managers is considered_______________

e) Taxable or not? __________

V

Pido, a widower, has two sons by his previous marriage. Pido lives with Dida who is legally married to Mario. They
have a child named Jill. The children are all minors and not gainfully employed.

a) How much personal exemption can Charlie claim? ___________

b) How much additional exemption can Charlie claim? __________

VI

Mr. E and Ms. F are both employees of A A A Corp. They got married on February 14, 2011. On December 29, 2011,
the couple gave birth to triplets. On June 25, 2013, they had twins. On May 2014, the twins died. On January 2, 2015,
Mr. E lost his job while Ms. F is gainfully employed. What were the personal exemptions/deductions which Mr. E
and Ms. F could claim in the following taxable years:

Mr. E Ms. F

a) For 2010 ____________________ _____________________

b) For 2011 ____________________ _____________________
c) For 2013 ____________________ _____________________
d) For 2014 ____________________ _____________________
e) For 2015 ____________________ _____________________

PART III