ASSIGNMENT

INCOME TAXATION

I. A and B are stockholders in corporation which are being consolidated into a new corporation, had the
following data on their shares of stock:
Consideration received A B
FMV of shares P75,000 P81,000
FMV of property 5,000 5,000
Cash 10,000 4,000
Cost of shares surrendered 80,000 80,000

The gain or (loss) to be recognized by A ________________ and B ____________________

II. A transferred his commercial land which he acquired for P10M to B Corporation and as consideration
he received shares of stock of B Corporation with a FMV of P10.2M and cash of P300,000. As a result,
A acquired control of B Corporation. Two months later, A sold the B Corporation shares for P10.5M.
The gain to be recognized on the transfer and on the sale is:
Transfer___________________ Sale___________________

III. Spouses A and B sold their family home, a capital asset for P5,000,000. It was acquired in 1980 at
P2,000,000. The FMV as determined by the BR is P6,00,000 but the FMV as shown in the schedule of
values of the City Assessor is P5,500,000. Later, the spouses utilized P4,000,000 for the acquisition of
their new family home.
The capital gains tax due is __________________
The cost basis of the new family home ___________________

IV. A sold 3 parcels of land held as capital assets, as follows:

Land 1 Land 2 Land 3
Selling Price P160,000 P160,000 P160,000
Cost 100,000 100,000 100,000
Installment Payment
Year 1 40,000 40,000 30,000
Year 2 120,000 60,000 20,000
Assumption of mortgage -0- 60,000 110,000

The capital gains tax to be paid in Year 1 ________________

The capital gains tax to be paid in Year 2 ________________