UNIVERSITY OF SAN JOSE-RECOLETOS

COLLEGE OF COMMERCE
TAXATION 2 PRE-MID DEPARTMENTAL EXAM
TEST 1: WRITE THE LETTER OF THE BEST ANSWER.
1. If what was donated is a conjugal/common property and only one of the spouses
signed the deed of donation,
A. there is only one donor for donors tax purposes.
B. the spouse who opposes the donation shall not be considered as a donor
and will not pay donors tax.
C. both of them are considered as donors
D. the full value of the conjugal/common property shall be included in the
gross gift of the donor.
E. only half of the value of the conjugal/common property shall be included in
the gross gift of the consenting spouse.
F. requires two separate computations of donors tax
a. true, true, false, true, false, false
c. true, true, false, false, true,
false
b. false, false, true, false, true, true
d. false, false, true,
false,true,false
2. A. The computation of the donors tax is on a cumulative basis over a period of
one calendar year.
B. When the donor makes two or more donations within the same calendar year,
it is required that the said donations be included in the return for the last donation.
C. In the donors tax return, the computation of tax on donation to stranger and
relative is separate. However, the total amount payable shall be contained in one
tax return only.
D. The place of payment of the donors tax return is fixed at the place of residence
of the donor and is not subject to his will.
a. all true
c. true, true, true, false
b. all false
d. true, true, false, true
3. A. The rule on transfer for insufficient consideration does not apply to transfer of
real property considered as a capital asset.
B. A donated real property cannot be registered in the name of the donee unless
the donors tax thereon had already been paid.
C. In case of a deficiency donors tax, the donee shall not pay even if the property
is already in his possession.
D. The income tax on income of a donated property after the donation but before
registration in the name of the donee is still payable by the donor.
a. all true
c. true, true, false, true
b. all false
. true, true, true, false
4. A. Tax credit for donors tax paid to a foreign country is allowed only if the donor
is a citizen or resident of the Philippines.
B. There can be a donors tax paid to a foreign country even if the citizen or
resident donor had no donation of property in the Philippines.

C. In taking credit for the foreign donors tax paid, the credit shall be against the
Philippine donors tax on the donation to the non-stranger and that to the stranger.
a. all true
c. true, true, false
b. all false
d. true, false, true
5. A. Premium payments on the life insurance of another are not subject to donors
tax.
B. Premium payments are subject to donors tax if the beneficiary is other than
the estate, executor or administrator and the designation is irrevocable.
C. Premium payments are subject to estate tax if the beneficiary is the estate,
executor or administrator whether the designation is revocable or not.
a. all true
c. true, true, false
b. all false
d. false, true, true
6. A. Resident alien can avail of dowry deduction even if the donee is a non-resident
alien.
B. Non-resident alien cannot avail of dowry deduction even if the donee is a
resident alien.
a. all true
c. true, false
b. all false
d. false, true
7. A. There is donation inter vivos when the donor intends that the donation shall
take effect during the lifetime of the donor, though the property shall not be
delivered until after the donors death.
B. There is donation mortis causa when the donor intends that the donation shall
take effect after the death of the decedent , though the property has already been
delivered prior to donors death.
C. An essentially mortis causa transfer which has been titled as inter vivos shall
be subject to estate tax.
a. all true
c. true, false, true
b. all false
d. false, true, false
8. A. If the net gift does not exceed p100,000, it is exempt in all cases.
B. if the net estate does not exceed p200,000, it is exempt in all cases.
a. all true
c. true, false
b. all false
d. false, true
9. A privilege tax imposed on onerous transfers inter vivos:
a.
b.
10. An
a.
b.

Gift tax
c. Income tax
Estate tax
d. Donors tax
excise tax on gratuitous transfers mortis causa
Gift tax
c. Income tax
Estate tax
d. Donors tax

11.Three of the following are exempt or excluded from the donors tax. Which is the exception?
a.
b.
c.
d.

P200,000 cash given by a non-resident alien donor to his legitimate son who is getting
married in the Philippines to a Filipina.
P10,000 cash given by a resident alien donor to his legitimate son who is getting married in
the Philippines.
Donation of a condominium in Hongkong to a Filipina by a British national not residing in the
Philippines.
P150,000 donation to a non-profit school.

12. One of the following is not a relative by consanguinity in the collateral line within the fourth
b.

degree of relationship.
a. Daughter of the donors nephew
First cousin of the donor
c. Niece of the donor
d. Second cousin of the donor
13. John sold his car to Sam. Johns car cost P300,000 and has a fair market value of

P400,000 at the same time of sale. The car was sold for P200,000. For donors tax purposes,
which of the following statements is correct?
a. There is taxable gift of P300,000.
b. There is a taxable gift of P200,000.
c. The transfer is subject to capital gains tax
d. The transfer involves a personal property, hence, not a subject to gift tax.

14. A. Vanishing deduction is always exclusive under conjugal partnership of gains.

B. Gratuitous title during marriage is always exclusive regardless of the
property regime.
C. Property acquired thru own effort of the surviving spouse is always conjugal
or common property.
D. Fruit from gratuitous title is always conjugal property whether the transfer
was made before or after marriage.
E. Fruit from onerous title during marriage is always conjugal/common property.
a. all true
c. true, true, false, true, true
b. all false
d. true, true, false, false, true
15. A. Properties which are for personal and exclusive use of the decedent are
always exclusively own by the decedent.
B. Medical expenses may not be related on the illness resulting in death of the
decedent.
C. There is no vanishing deduction if the tax due of the first transfer is zero.
D. Funeral expenses include expenses covered by memorial plan.
E. Claims against insolvent person may not be notarized.
F. Mortgage paid in vanishing deduction includes payment made by the
transferor and the transferee.
a. all true
c. true, true, false, true, true
b. all false
d. false, true, false, true, true
Stephen and Sunshine donated the following properties to his daughter Lora and
son-in-law Jayvee on account of marriage:
1/5/13 house and lot with a p200,000 mortgage payable to be assumed by the
donee
1,000,000
11/1/13 cash
50,000
12/ 2/14 car
500,000
Answer the following independent cases:
16. How much is the aggregate net gifts of Stephen given to Lora in 2013?
17. How much is the donors tax due of Sunshine relating to the gifts given to
Jayvee in 11/1/13?

18. Assuming Sunshine opposed on the donation given to the spouses, how much is
the gross gift of Stephen given to Jayvee on 1/5/13?
19. Assuming the marriage did not actually take place, how much is the donors tax
due of Stephen to Lora in 11/1/13?
20. How much is the aggregate net gifts of Sunshine to Lora assuming the latter is a
non-resident alien?
21. How much is the donors tax due of Sunshine relating to the gifts given to Lora
assuming Lora is a non-resident alien on 12/2/14?
A 70 year old father Dimathay died in a car accident together with his 27 year old
son Mathako and his daughter in law Mathara. The father and son were dead on
arrival at the hospital while the daughter in law died after one day at the hospital.
Upon knowing their death, the spouse of Dimathay named Diphatay died due to
heart attack. The only relative left is the son of Mathako and Matharo named
Mathakoro. The following properties were left by the testators:
Dimathay:
Mathako:
Diphatay:
Matharo:

exclusive property
common property
Total common deductions
exclusive property
Common property
Total common deductions
exclusive property
exclusive property

3,000,000
4,000,000
2,000,000
1,000,000
2,000,000
1,000,000
3,000,000
2,000,000

22. How much is the inheritance of Diphatay from his spouse?

23. How much is the inheritance of Diphatay from his son?
24. How much is the inheritance of Mathara from his spouse?
25. How much is the inheritance of Mathakoro from his father?
26. How much is the inheritance of Mathakoro from his mother?
27. How much is the inheritance of Mathakoro from his grandmother?
The taxpayer was married and left the following properties at the time of his death.
Acquired before marriage:
Apartment
4,000,000
Family Lot
500,000
Acquired after marriage:
Cash in Bank
Receivable from
Group insurance
SSS insurance
Family Home
Real property inherited during the year
Income from the gratuitous title
Income from onerous title
Expenses/charges:
Apartment was transferred to Red Cross

500,000
100,000
200,000
900,000
800,000
100,000
200,000
4,000,000

for the shelter of Yolanda victims

Memorial Plan
Claims against insolvent person
Medical expenses paid by pre-need company

100,000
100,000
600,000

28. Compute the ne estate under absolute community of property regime.

28. Compute the net taxable estate under absolute community of property regime.
29. Compute the net distributable estate under absolute community of property
regime.
30. Compute the gross estate under Conjugal partnership of Gains.
31. Compute the net estate under conjugal partnership of gains.
32. Compute the share of surviving spouse under conjugal partnership of gains.
33. Assuming the taxpayer is an Australian living in USA, how much is the gross
estate?
34. Assuming the taxpayer is an American residing in New York, how much is the
gross estate?
A donation was made by a Filipino citizen named Magadan, to Santillan Company, of
property in a foreign country with a fair market value of p300,000. Foreign donors
tax of P70,000 was paid. There was a donation earlier in the year of p150,000 cash
to Mr. Torrefranca, an illegitimate child.
35.
36.
37.
38.
39.

How
How
How
How
How

much
much
much
much
much

is
is
is
is
is

the
the
the
the
the

donors tax on the gift made to Santillan Company?

donors tax on prior net gifts?
donors tax on aggregate net gifts?
donors tax before tax credit?
donors tax still due?

The taxpayer is a non-resident alien at the time of death.

Gross Estate
Deductions
Estate tax paid
Philippines 5,000,000
300,000
Canada
1,000,000
400,000
30,000
Thailand
2,000,000
600,000
50,000
40. How much is the total net estate of the taxpayer?
41. How much is the foreign tax credit?
42. How much is the estate tax due after tax credit?
43. A. Standard deduction need not be classified as exclusive or conjugal/common
property.
B. Standard deduction need not be reflected in the estate tax return.
a. all true
c. true, false
b. all false
d. false, true
44. A. Unmarried individual cannot claim Family home deduction.
B. Non-resident alien cannot claim Family home deduction.
a. all true
c. true, false
b. all false
d. false, true

45. A. For a vanishing deduction to be deductible, the property must have formed
part of the gross estate situated in the Philippines of the prior transferor.
B. In computing vanishing deduction, the value to be used is the fair market
value at the time of transfer or at the time death whichever is lower.
a. all true
c. false, true
b. all false
d. true, false
46. A. Filing of estate tax return shall be within 6 months from the death of the
decedent and may be extended by 30 days upon meritorious cases.
B. Filing of Donors tax return shall be made within 30 days from the date of
donation and can never be extended.
a. all true
c. true, false
b. all false
d. false, true
47. A. BIR Form 1801 is the Estate Tax Return.
B. BIR Form 1800 is the Donors tax return.
a. all true
c. true, false
b. all false
d. false, true
48. A. Payment of estate tax can be extended judicially by 2 years.
B. Payment of estate tax can be extended extrajudicially by 5 years.
49. A. Notice of death is needed if the gross estate is p20,000 or more.
B. Estate tax return is needed if the net estate or gross estate exceeds 200,000.
C. CPA certificate is needed if the gross estate is p2,000,000 or more.
D. Estate tax return is needed even if the transfer is exempt from tax.
a. all true
c. false, true, false, true
b. all false
d. false, true, false, false
50. A. Both estate tax and donors tax are direct tax, excise tax and privilege tax.
B. Both estate tax and donors tax are not property tax.
a. all true
c. true, false
b. all false
d. false, true