Reviewer: Tax 1

I. Modified True or False. If false, underline the wrong word/s and write the correct
answer/s.

__________1. The proceeds of life insurance policies paid to the heirs or

beneficiaries upon the death of the insured shall be included in the
gross income.

__________2. Retirement benefits received under Republic Act 7641 shall be

excluded from gross income provided that the retiring official or
employee has been in the service of the same employer for at least
15 years and is not less than 50 years of age at the time of his
retirement.

__________3. Prizes and awards made primarily in recognition of religious,

charitable, scientific, educational, artistic, literary, or civic achievement
shall be excluded in the gross income if the recipient was selected
without any action on his part to enter the contest and if he/she is
required to render substantial future services as a condition.

___________4. All prizes and awards granted to athletes in local and international
sports competitions and tournaments whether held in the Philippines
or abroad and sanctioned by their national sports associations shall
be excluded in the gross income.

___________5. Risk pay shall mean the amount paid by the employer to MWEs who
were actually assigned to danger or strife-torn areas, disease-
infested places, or in distressed or isolated stations and camps,
which expose them to great danger of contagion or peril in life.

___________6. Annuities are distributions made by a corporation out of its earnings

or profits accrued that is payable to its shareholders.

___________7. For income arising from rentals of property, a taxpayer must report
as part of gross income advance rentals received during the taxable
year, including rentals actually earned but uncollected as of the end
of such period.
 ___________8. Compensation means all remuneration for services performed by an
employee for his employer under an employer-employee
relationship.

___________9. A tax is said to be regressive if the average rate increases as the

tax base increases.

__________10. Eminent Domain is the power of the state to enact laws to promote
public health, public morals, public safety and the general welfare of
the people.

II. Problem Solving. Compute what is asked.

Mr. Lopez, married with two qualified dependent children who received the following
compensation for 2017:
Basic Monthly salary 45,000.00
Overtime pay for November 5,000.00
Thirteenth Month Pay 45,000.00
Other Benefits 12,000.00
Withholding tax (Jan-Nov) 98,082,27

1. How much is the Gross Taxable Income?

2. How much is the Net Taxable Income?
3. How much is the Total Tax Due?
4. How much is the collectible tax in December 2017?

Mr. Antonio is a resident citizen married with 6 qualified dependent children. The
following data are available:
Gross compensation income 240,000.00
Premium payment on health insurance 10,000.00

5. How much is the Net Taxable Income?

6. How much is the Total Tax Due?
Mr. Sy is a resident alien earning both business and compensation income in the
Philippines with 5 dependent children. The following data are available:
Gross compensation income 240,000
Premium payment on health insurance 15,000
Gross business income 600,000
Itemized deductions 300,000

7. How much is the Gross Taxable Income?

8. How much is the Total Allowable Deductions?
9. How much is the Net Taxable Income?
10. How much is the Total Tax Due?