Extras

Question 1

PRINCIPLES OF CASH BASIS
- Advanced Income → taxable
- Prepaid Expense → not deductible

Answer 1

Yes

Question 2

Can he use installment method?
- personal property (dealer)
- personal property (X dealer)
- real property (dealer)
- real property (X dealer)

Answer 2

Personal Property
- dealer → yes
- X dealer → yes if SP >1K, IP ≤ 25% of SP

Real Property
- dealer → yes if IP ≤ 25% of SP
- X dealer → yes if IP ≤ 25% of SP

Question 3

DIFFERENCE OF SELLING PRICE & CONTRACT PRICE
- Selling Price → qualifier
- Contract Price → divided

How to compute initial payment?
How to compute contract price?

Answer 3

Downpayment
‘+ Collections - year of Sale
+ Excess - mortgage over cost
= Initial Payment

Selling Price
less : Mortgage - assumed by buyer
+ Excess - mortgage over cost
= Contract Price

Question 4

Creditable Withholding Tax
- Contractor → 2%
- Rentals → 5% (5 letters)
- Goods → 1% (isa S)
- Services → 2% (dalawa S)
- GPP to Partners ≤ 720K → 5%. True or False?
- GPP to Partners > 720K → 10%. True or False?
- Professionals - GI ≤ 3M → 5%. True or False?
- Professionals - GI > 3M → 10%. True or False?

Answer 4

False, False, True, True
- GPP to Partners ≤ 720K → 10%
- GPP to Partners > 720K → 15%

Question 5

DOCUMENTARY STAMP TAX
- liable → any party
- deadline → 5th day next month

SCOPE OF DST
- rights / obligations → from PH
- property → in PH

FAILURE TO PAY DST
- ✘ invalidate transaction
- ✘ registered in registry of deeds
- ✘ accepted in courts

Answer 5

Yes

Question 6

DST - Debt Instruments
- rate → 0.75%. True or False?
- basis → issue price. True or False?

Answer 6

True, True
- if less than 1 year → basis = proportionate / 365

Question 7

DST - Shares (Original Issuance)
- rate → 0.75%. True or False?
- basis → issue price. True or False?

Answer 7

Not Sure, False
- rate → 0.75% now, 2 per 200 old
- basis → par value (since shares)

if no par → basis = actual consideration
if stock dividends → basis = actual value

Question 8

DST - Shares (Sales)
- rate → 0.75%. True or False?
- basis → par value. True or False?

Answer 8

True, True
- rate → 0.75% (1.5 per 200)
- basis → par value (since shares)

if no par → 50% of DST on original issuance

Question 9

DST - Real Property
- rate → 0.75%. True or False?
- basis → ↑ SP or FMV. True or False?

Answer 9

False, True
- rate → 1.5%
- basis → SP or FMV

Question 10

DST - Leases
- rate → P5 for first 2K, P2 per 1K. True or False?
- basis → rentals. True or False?

Answer 10

False, True
- rate → P6 for first 2K, P2 per 1K
- basis → rentals

Leases = 6 letters, 2 S

Question 11

DST - Mortgage
- rate → P40 for first 5K, P20 per 5K. True or False?
- basis → loan. True or False?

Answer 11

True, True
- rate → P40 for first 5K, P20 per 5K
- basis → loan

Leases = 2K, 1K
Mortgage = 5K, 5K