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Taxation Quiz Solution Guide

The document is a solution manual for a quiz on Documentary Stamp Tax (DST) related to various financial transactions, including stock issuances and land sales. It provides calculations for DST on original issuances of shares, sales of land, and other related transactions, detailing the amounts and applicable tax rates. Additionally, it includes exemptions and specific cases where DST is not applicable.

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Warren Levithan
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119 views2 pages

Taxation Quiz Solution Guide

The document is a solution manual for a quiz on Documentary Stamp Tax (DST) related to various financial transactions, including stock issuances and land sales. It provides calculations for DST on original issuances of shares, sales of land, and other related transactions, detailing the amounts and applicable tax rates. Additionally, it includes exemptions and specific cases where DST is not applicable.

Uploaded by

Warren Levithan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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University of San Jose – Recoletos

School of Business and Management


Accountancy and Finance Department

TAX 3 – OTHER TAXES AND PREFERENTIAL TAXATION

Q U I Z N O . 1 - P R E L I M S
Documentary Stamp Tax
(SOLUTION MANUAL)

Items 21 to 22

Consideration received on original issuance of without par shares of stocks:


PhP 750,000 X 40% = PhP 300,000

DST on original issuance of without par shares of stocks (Sec. 174):


PhP 300,000 / 200 X 2 = PhP 3,000

DST on original issuance of with par shares of stocks (Sec. 174):


PhP 8,500 – PhP 3,000 = PhP 5,500

Par value on original issuance of shares of stocks:


PhP 5,500 X 200 / 2 = PhP 550,000

DST on sale of par value shares of stocks originally issued (Sec. 175):
PhP 550,000 / 200 X 1.5 = PhP 4,125 D

DST on sale of without par value shares of stocks originally issued (Sec. 175):
PhP 3,000 X 50% = PhP 1,500 B

Item 23

Value of the land subjected to donor’s tax:


PhP 30,000 / 6% = PhP 500,000

DST on donation of land evidenced by a deed of donation (Sec. 196):


PhP 500,000 / 1,000 X 15 = PhP 7,500 A

Item 24

Sale to a regular citizen buyer (consideration is higher than fair market zonal value):
PhP 4,500,000 / 1,000 X 15 = PhP 67,500

Sale to the government (consideration tax base):


PhP 4,500,000 / 1,000 X 15 = PhP 67,500

Total DST on sale of land evidenced by a deed of sale (Sec. 196):


PhP 67,500 + PhP 67,500 = PhP 135,000 D

Item 25

DOCUMENTS DST
Transcript of records worth PhP 500 PhP 30.00
Special Power of Attorney worth PhP 1,000 10.00
Promissory note worth PhP 4,000 0.00
5 Warehouse receipts worth PhP 20,000 each 150.00
2 Certificate of damage worth PhP 2,000 each 60.00
TOTAL PhP 250.00 A

The promissory note worth PhP 4,000 is below the threshold for it to be subjected to
DST; hence, such is exempt from DST.
Item 26

PROPERTY INSURANCE POLICIES


Pro Insurance Company (5 X PhP 10,000) PhP 50,000.00
Moon Insurance Corporation (2 X PhP 100,000) 200,000.00
Axe Insurance Incorporated (1 X PhP 750,000) 750,000.00
TOTAL PhP 1,000,000.00
Multiply by: DST Rate 12.5%
DST Applicable PhP 125,000.00 C

Item 27

D. None of choice, since documentary stamp tax are not applicable to sale of personal
properties such as cars.

Item 28

Sale of land (PhP 56 million X 1.5%) PhP 840,000.00


Original issuance of shares (56 million X 1%) 560,000.00
DST Due PhP 1,400,000.00 C

Items 29 to 30

Original Issuance of Without Par Shares:


PhP 250,000 X 1% = PhP 2,500, (none of choices) D

Subsequently Sale of With Par Shares:


PhP 200,000 X 0.75% = PhP 1,500 B

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