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08 Activity 1

The document contains solutions to questions about the taxable incomes and distributions of partners in a general professional partnership (GPP). 1) The taxable income of the GPP is P600,000 which is considered passive income subject to final withholding tax. 2) Each partner's distributable share of the GPP's P2.1 million net income is P700,000 when divided equally among the three partners. 3) The taxable income of partner Cabarles is P2.8 million based on gross income of P3.5 million and expenses of P1.2 million plus a P500,000 share of GPP net income.

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Cj Moonton
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388 views

08 Activity 1

The document contains solutions to questions about the taxable incomes and distributions of partners in a general professional partnership (GPP). 1) The taxable income of the GPP is P600,000 which is considered passive income subject to final withholding tax. 2) Each partner's distributable share of the GPP's P2.1 million net income is P700,000 when divided equally among the three partners. 3) The taxable income of partner Cabarles is P2.8 million based on gross income of P3.5 million and expenses of P1.2 million plus a P500,000 share of GPP net income.

Uploaded by

Cj Moonton
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: Jayson G.

Nate 08 Activity 1
Section: BSA 202 May 15,2023

1.How much is the taxable income of the Partnership? Justify your answer.
Answer: The taxable income of the Partnership is P 600,000 because it is a General Professional
Partnership(GPP),GPP is not included in the definition of the corporation under Section 22 of the Tax
Code, therefore it is not taxable as a corporation. But GPP IS Subject to Final Withholding Tax on its
passive income and the P 600,000 of the COS Partnership is a passive income.
2.How much is each partner’s distributive share in the net income of the GPP?
Answer: P 700,000
Solution:
Gross Income P 5,000,000
Expenses ( 3,500,000)
Net Income 1,500,000
Add: Income Subject to final tax 600,000
Distributable Income of the Partnership 2,100,000
Divide by the numbers of partners 3
Distributive Share of a partner P 700,000
3. How much is the taxable income of Cabarles?
Answer: P 2,800,000
Solution:
Gross Income P 3,500,000
Expenses (1,200,000)
Share in the net income of GPP 500,000
Partner’s Taxable Income P 2,800,000

4. Assume the Partnership is a general( commercial) partnership; how much are the partnership’s taxable
income?
Answer: P 1,500,000
Solution:
Gross Income P 5,000,000
Expenses (3,500,000)
Taxable Income P 1,500,000

5.Using the same assumption in item #4, how much is the taxable income of Sia?
Answer: P 1,975,000
Solution:
Gross Income P 2,800,000
Expenses (825,000)
Taxable Income P 1,975,000
6.Using the same assumption in item #4,how much is the final tax of each partner from their share in
the net income of the Partnership?
Answer: The final tax of Cabarles, Ong, and Sia is P 900,000.
Solution:
Cabarles Ong Sia
Income Subject to Final Tax(Net) P 200,000 P 200,000 P 200,000
Share in Net In Income 700,000 700,000 700,000
Income Subject to Final Tax P 900,000 P 900,000 P 900,000

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