Question1. These statements on forgiveness of indebtedness are presented to you for evaluation:Statement I – If the creditor condones the debt of his debtor on account of services rendered by the debtor, the debt forgiven is a taxable gift by the creditor to his debtor.Statement II – If the creditor condones the debt of his debtor without any consideration therefor and there is acceptance by the debtor, the amount of the debt shall considered as taxable income to the debtor.In your evaluation of the foregoing statements:Group of answer choicesOnly Statement II is true.Only Statement I is true.Both statements are false.Both statements are true.2. These statements are presented to you for evaluation:Statement I – Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any of its political subdivisions, are exempt from the donor’s tax.Statement II – Donations made to educational and/or charitable, religious, cultural or social welfare institution shall be exempt from donor’s tax provided that not more than thirty percent (30%) of the said gifts shall be used by the donee for administrative purposes.In your evaluation of the foregoing statements:Group of answer choicesOnly Statement I is true.Both statements are true.Both statements are false.Only Statement II is true.3. What kind of tax is the donor’s tax?Group of answer choicesCapitation tax.Personal tax.Privilege or excise tax.Property tax.4. A donor’s tax credit for foreign donor’s taxes paid is allowed in the following cases, except when the donor is:Group of answer choicesa citizen of the Philippines not residing in the Philippines.an alien not residing in the Philippines.a citizen of the Philippines residing in the Philippines.an alien residing in the Philippines.5. These statements are presented to you for evaluation:Statement I – If the property donated is a movable property whose value is P5,000.00 or less, the donation and its acceptance may be made orally.Statement II – If the property donated is an immovable property, the donation and the acceptance, regardless of the value of the property, must be made in a public instrument.In your evaluation of the foregoing statements:Group of answer choicesOnly Statement II is true.Both statements are true.Only Statement I is true.Both statements are false.6. These statements are presented to you for evaluation:Statement I – A donation cannot be validly made in favor of a minor because he is incapable of entering into a contract.Statement II – Donations may be validly made in favor of conceived and unborn children but the acceptance of the donation must be made by those persons who would legally represent them if they were already born. In your evaluation of the foregoing statements:Group of answer choicesOnly Statement I is true.Only Statement II is true.Both statements are true.Both statements are false.7. These statements are presented to you for evaluation:Statement I – A donation to be valid requires the acceptance thereof by the donee during the lifetime of the donor.Statement II – A donation is perfected from the moment the donor comes to know of its acceptance by the donee.In your evaluation of the foregoing statements:Group of answer choicesBoth statements are true.Only Statement I is true.Only Statement II is true.Both statements are false.8. These cases are presented to you for evaluation:Case I – Mr. A, 95 years old and very sickly, widower with no dependents, donated a parcel of land in favor of Mr. B, his nephew. The donation and the acceptance were made in a public instrument. After Mr. A filed the donor’s tax return and paid the corresponding donor’s tax, the examiner from the Bureau of Internal Revenue claimed that the donation was made in contemplation of death because Mr. A was already very old and sick; hence, he informed Mr. A that the latter should have paid the estate tax instead of the donor’s tax.Case II – M, a man, and W, a woman, have been living together as husband and wife without the benefit of marriage for many years. During the calendar year, M donated to W a brand-new Toyota Land Cruiser valued at P4,000,000.00. The donation is valid because the prohibition on donations between a man and a woman applies only to those who are legally married.In your evaluation of the foregoing cases:Group of answer choicesBoth cases are correct.Only Case II is correct.Only Case I is correct.Both cases are incorrect.9. These statements are presented to you for evaluation:Statement I – A remuneratory donation made in consideration for the services rendered by the donee to the donor provided it does not constitute a demandable debt is not subject to donor’s tax but to income tax.Statement II – Election campaign contributions that have been utilized during the campaign period as set by the Commission on Elections are exempt from the donor’s tax.In your evaluation of the foregoing statements:Group of answer choicesOnly Statement II is true.Only Statement I is true.Both statements are true.Both statements are false.10. These statements are presented to you for evaluation:Statement I – A separate donor’s tax return is required to be filed by each donor for each donation made on different dates during the year reflecting therein any previous net gifts in the same calendar year.Statement II – If the donation involves a common property of the husband and wife, only one donor’s tax return is filed by the spouses for each donation date.In your evaluation of the foregoing statements:Group of answer choicesBoth statements are false.Only Statement II is true.Both statements are true.Only Statement I is true.11. These statements are presented to you for evaluation:Statement I – A person may validly donate property which may be acquired by him in the future.Statement II – A donation is considered to be inofficious when is it more than the legitime of the donor’s compulsory heirs.In your evaluation of the foregoing statements:Group of answer choicesBoth statements are false.Only Statement I is true.Only Statement II is true.Both statements are true.12. These cases are presented to you for evaluation:Case I – Mr. Ismael Ignacio, a Filipino, sold his lot located in Batangas which he held as capital asset for P3,000,000.00. The actual fair market value of the lot was actually P3,500,000.00. Mr. Ignacio must pay the donor’s tax on the P500,000.00 representing the excess of the fair market value of the lot over the selling price.Case II – Mr. Jose Jornacion, sold his Toyota Fortuner, for P1,000,000.00. The actual fair market value of the motor vehicle was P1,300,000.00. Mr. Jornacion must pay the donor’s tax on the P300,000.00 representing the excess of the fair market value over the selling price.In your evaluation of the foregoing cases:Only Case II is correct.Both cases are correct.Both cases are incorrect.Only Case I is correct.Group of answer choicesBoth cases are incorrect.Only Case II is correct.Only Case I is correct.Both cases are correct.13. These statements are presented to you for evaluation:Statement I – The donor’s tax return is filed within thirty (30) days from the date the deed of donation is acknowledged by the parties before a notary public.Statement II – The donor’s tax is paid at the time the donor’s tax return is filed, following the “pay as you file” rule.In your evaluation of the foregoing statements:Group of answer choicesBoth statements are true.Only Statement I is true.Both statements are false.Only Statement II is true.14. These statements are presented to you for evaluation:Statement I – If the donor is a citizen or resident alien, properties for inclusion in the gross gifts are all properties located in the Philippines and outside of the Philippines at the time the donation was made.Statement II – If the donor is a non-resident alien, properties for inclusion in the gross gifts are all properties located in the Philippines, whether tangible or intangible, at the time of the donation, subject to the principle of reciprocity.In your evaluation of the foregoing statements:Group of answer choicesBoth statements are false.Both statements are true.Only Statement II is true.Only Statement I is true.LawSocial ScienceTax law BSA 2105
