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Capital asset
192. the term “capital assets” includes
a. stock in trade or other property included in the
taxpayer’s inventory
b. real property not used in the trade or business of
taxpayer
c. property primarily for sale to customers in the
ordinary course of trade or business
d. property used in the trade or business of the
taxpayer and subject to depreciation
b. real property not used in the trade or business of taxpayer
193. Which of the following real properties is classified as a
capital asset?
a. real property initially acquired by a taxpayer engaged in
real estate business but subsequently abandoned or become
idle
b. real property transferred through succession or donation
to the heir or done who is not engaged in the real estate
business with respect to the real property inherited or
donated, and who does not subsequently use such property
in trade or business
c. real properties of the real estate lessor, whether land
and/or improvements, which are for lease or being offered
for lease, or otherwise for use or being used in the trade or
business
d. real properties acquired in the course of trade or business
by a taxpayer habitually engaged in the sale of real estate
b. real property transferred through
succession or donation to the heir or done
who is not engaged in the real estate business
with respect to the real property inherited or
donated, and who does not subsequently use
such property in trade or business
194. under section 39(b) of the tax code, how much
shall be taken into account in computing net
income, if a gain is realized by an individual
taxpayer from the sale or exchange of capital assets
(other than real properties and shares of stocks)
held for more than 12 months?
a. 50% of the net capital gain
b. 5% of the capital assets sold
c. 50,000
d. 5,000
a. 50% of the net capital gain
195. lots being rented when subsequently sold are
classified as
a. capital assets
b. liquid assets
c. ordinary assets
d. fixed assets
c. ordinary assets
196. a feature of ordinary gains as distinguished from capital
gains
a. gain from sale of assets not stock in trade
b. may or may not be taxable in full
c. sources are capital assets
d. no holding period
d. no holding period
8. Which of the following is not a secondary
purpose of taxation
True or false
Only the second statement is correct
201. Joahna Corporation realized an ordinary gain
of 400,000. Its capital asset transactions during the
year are as follows:
Holding Amount
period
Capital gain 6 months 50,000
Capital gain 2 years 45,000
Capital loss 12 months 23,000
Capital loss 10 years 26,000
What is Joahna Corporations’ taxable income?
a. 484,000
b. 444,000
c. 435,500
d. 447,000
In a corporation, the holding bperiod of a capital
asset is not taken into account
Capital gain, 6 months 50,000
Capital gain, 2 years 45,000
Capital loss, 12 months (23,000)
Capital loss, 10 years (28,000)
Net capital gain 44,000
Add: Ordinary gain 400,000
Taxable income 444,000
202. Jose Sese, single, had the following data on
income and losses
2010 2011
Ordinary business income 56,700 60,800
Ineterst on time deposit 2,000 3,000
with PNB
Short-term capital gain 5,000 8,500
Long-term capital gain 3,600 5,200
Short-term capital loss 8,000 2,900
Long-term capital loss 4,400 -
In 2010, the taxable income before personal exemption of Jose Sese
a. 58,700
b. 53,300
c. 36,700
d. 56,700
Ordinary business income 56,700
Short term capital gain 5,000
(5,000 x 100%)
Long term capital gain 1,800
(3,600 x 50%)
Short term capital loss (8,000)
(8,000 x 100%)
Long-term capital loss (2,200)
(4,400 x 50%)
Net capital loss (3,400) -
Taxable income before 56,700
personal exemption
203. in 2011, the taxable income of Jose Sese is
a. 15,600
b. 69,000
c. 36,000
d. 45,600
Ordinary business income 60,800
Short term capital gain 8,500
(8,500 x 100%)
Long term capital gain 2,600
(5,200 x 50%)
Short term capital loss (2,900)
(2,900 x 100%)
Net capital gain 8,200
Less: Net capital loss carry 3,400 4,800
over from 2010
Taxable income before 65,600
personal exemption
Less: Personla exemption 50,000
Taxable income 15,600
204. santos qualified as head of a household for
2010 for tax purposes. Santos’ 2011 taxable income
was 200,000 exclusive of capital gains and losses.
Santos had a net long term loss of 8,000 in 2011.
What amount of this capital loss can Santos offset
against 2011 ordinary income?
a. 0
b. 3,000
c. 4,000
d. 8,000
a
the basic rule in capital asset transactions is that the
capital losses are deductible only from capital
gains. Therefore, the capital loss in 2011 cannot be
offset from the ordinary income
numbers 205-206
PE 50,000
TI -
206. the taxable income in 2011 is
a. 76,000
b. 55,000
c. 115,000
d. 10,000
NI 95,000
PE (50,000)
TI 55,000
The amount of carry over of the net capital losses
should not exceed the net income during the year in
which the loss was sustained
207. all of the following, except one, results to a
capital gain or loss
a. gain on short sales
b. option loss
c. worthless securities
d. ordinary gains
d. ordinary gains
208. a transaction in which the speculator sells
securities which he does not own (he merely
borrows the stock certificate through or from his
stock broker) in anticipation of a decline in its price
and within a reasonably short period of time buys
or covers the stock to complete the transaction
a. wash sale
b. short sale
c. auction sale
d. rescissible sale
b. short sale
209. A bought from B Corporation ten shares of
stock. Sixty days thereafter, the corporation was
adjudged bankrupt and its stock as worthless. The
loss of A to be reported for income tax purposes is
classified as
a. wagering loss
b. non deductible loss for income tax purposes
c. short term capital loss
d. casualty loss
c. short term capital
loss
210. on capital gains tax on real property, which of
the following statements is not correct?
a. the tax should be paid, if in one lump sum, within
30 days from the date of sale
b. the term “initial payment” is synonymous to
“downpayment”
c. the installment payment of the tax should be
made within 30 days from receipt of each
installment payment on the selling price
d. the tax may be paid in installment if the initial
payments do not exceed 25% of the selling price
b. the term “initial payment” is synonymous to
“downpayment”
211. Janet said her principal residence for 5,000,000
when its fair market value was 6,000,000. The
house was purchased five years ago for 3,000,000.
Out of the proceeds of 5,000,000, Janet utilized the
4,000,000 for the purchase of new residential house
Unutilied portion
Selling price x Basis of old residence = basis of new residence
4M/ 5M x 3M = 2,400,000
213. Malou has the following data in 2010:
Sale of property Holding Gain/loss
period
Rate of tax 6%
*=whichever is higher
= 3.5M x (3M-1.5M)/3M x 6%
= (3.5M x 50%) x 6%
= 105,000
219. Mr julio Canlas is not engaged in real estate
business. He sold a 1,000 square meter residential
land for 300,000 on March 15, 2011. The land was
acquired by purchase on March 5, 008 for 120,000.
After acquisition, the land was fenced at a cost of
30,000. A commission of 5% of the sales price was
paid to the sales agent.
Rate of tax 6%
CGT 18,000
220. Cito has the following records of transactions:
Capital gains (short term on sale of-
Domestic shares listed and traded in the stock 22,400
exchange
Vacant lot, thru a broker, located in mabila (MV= 150,000
700,000)
Residential house in New York City 100,000
Capital loss-(long term) on sale of
Land in Vancouver, Canada 125,000
Family car 50,000
The capital gains tax on the sale if the shares are not
listed and traded in the PSE
a. 2,250
b. 2,625
c. 14,000
d. 11,375
Gross selling price (120x1,500) 180,000
CGT 2,250
224. Ronald sold 1,000 shares of not listed and
traded shares of stocks. The data of which are as
follows:
SP 600,000
FMV 620,000
Expenses on the sale 10,000
Purchase price 440,000
Expenses upon acquisition 3,000
CGT 9,700
225. Nada sold the following shares of stock during
the year:
Listed and Not listed and Listed and
traded traded traded
SP 1,500,000 630,000 210,000
Cost 1,230,000 570,000 170,000
Date sold 01-20-11 03-16-11 11-14-11
X rate of tax 5%
CGT 3,000
225-229
Francia, a resident citizen, had the following
transactions of not listed and traded shares of stocks
Date of sale Date of cost Selling price
acquisition
2.13.2011 1.18.2009 80,000 135,000
4.5.2011 11.30.2010 256,000 360,000
7.20.2011 9.3.2009 175,000 115,000
10.12.2011 8.7.2011 144,500 150,000
225. The capital gains tax on the February 13, 2011
sale
a. 2,750
b. 1,375
c. 675
d. 55,000
Selling price 135,000
Base 27,500
Rate of tax 5%
CGT 1,375
227. the capital gains tax on April 5, 2011 sale is
a. 10,400
b. 5,400
c. 5,200
d. none
Gross selling price 360,000
Less: Cost 256,000
Net capital gain (short 104,000
term)
CGT 5,400
228. the capital gains tax/refund on the July 20,
2011 sale is
a. 3,000
b. (3,000)
c. 1,500
d. none
If the sale of shares of stocks (not traded) results to a loss,
no capital gains tax shall be paid by the seller
SP 115,000
Less: cost 175,000
Net capital loss 60,000
229. the final capital gain tax/refund at the end of
the year is
a. tax payable of 1,350
b. tax refund of 1,350
c. tax payable of 2,725
d. tax refund of 2,725
Date of sale Selling price cost Capital gain Tax paid
2.13.2011 135,000 80,000 27,500 1,375
4.5.2011 360,000 256,000 104,000 5,400
7.20.2011 115,000 175,000 (30,000) -
10.12.2011 150,000 144,500 5,500 275
760,000 655,500 107,000 7,050