MULTIPLE CHOICE QUESTIONS IN TAX REVIEW

January 5, 2011
Submitted by Guerrero, Joey Andrew G.

1. For bad debts to be deductible, the following requisites must concur, except:
a. There must be a valid a subsisting debt
b. The debt must be connected with the taxpayer’s trade or business
c. The debt must be actually worthless
d. The debt must be partially charged-off within the taxable year

2. The gradual dimunition of the useful value of tangible property resulting from ordinary wear and tear:
a. Depletion
b. Depreciation
c. Declination
d. Deduction

3. Under present law, a family with six children will have a maximum tax exemption of:
a. P 200,000.00
b. P 96,000.00
c. P 150,000.00
d. P 250,000.00

4. The following Resident Foreign Corporations are subject to preferential tax rates, except:
a. Regional Operating Headquarters
b. International Carriers
c. Regional Area Headquarters
d. Offshore Banking Units

5. A resident Filipino citizen who became an Overseas Contract Worker is taxed as follows:
a. Tax-exempt
b. On income derived without the Philippines only
c. On income derived within and without the Philippines
d. On income derived within the Philippines only

6. The following may be considered De Minimis Benefits, except:

a. Laundry Allowance
b. Rice subsidy
c. Expenses for Foreign Travel
d. Medical benefits

7. The following are exempt from improperly accumulated earnings tax, except:
a. Closely-held corporations
b. Banks
c. Publicly-held corporations
d. Insurance companies

8. The Withholding Tax System was devised for the following reasons, except:
a. To provide the taxpayer a convenient manner to meet his probable income tax liability
b. To ensure the collection of the income tax
c. To improve the government’s cash flow
d. To do away with the filing of income tax returns

9. The following property of a resident alien is subject to estate tax upon death:
a. Real and Personal Property situated within the Philippines
b. Real and Personal Property wherever situated
c. Real and Personal Property outside the Philippines
d. Only Real Property in the Philippines

10. Which is not included in the Gross Estate subject to Estate Tax?
a. Transfers in contemplation of death
b. Revocable Transfers
c. Transfers for public use
d. Transfers for Insufficient consideration