al properties ac Ee developed and s Real properties held are not intended for sale _ The depreciable assets of realtor assets. ~ ond aaset ered eee 4, A taxpayer who is not engaged in a real estate business can * ™ ‘assify its real property previously used in business as cap ; asset upon showing proof that the same have not been used in business for more than two years. eo 5, If the property was acquired as gift, the cost basis to compute gain or loss is the fair market value at the time of donation. i gost to the donor or Emu Clower), 4 6. There is no holding period for sale of shares of stock held by dealers in securities for more than one year. 7. No NIRC tax is to be paid if the sale of shares of stock is traded jn the local stock exchange and it resulted to a capital loss. Nosh [7h etek truntecton tor 8. All sales pertaining to real properties are subject to a capital gains tax of 6% eal prroerres clasabed af Oh (S cable 1 normal tay 7 9. Net capital loss carry over is not applicable for corporations. 10. The loss on sale of debt securities sustained by a bank is a capital loss. ordinary (C4 16 = acquired tor Clore loan ¢ettlenunes | 1 capital 0c coved by dante 1 11. The net capital loss carry over of an individual taxpayer is limited to the amount of taxable income in the year when te ‘ loss was sustained.Bent iepcorect On AI stat 7-2 Write True if the hased goodwill that is subsequently sold + 1. The purcha: “a to the taxpayer to choose | 2. It is always Fee tax jp = tax than the norm 2 gh FT baed om ST ¥ 4 government. ad, patmos TW prekereahie” ahre (C al r Baie of reel Groperties to S85 or GSIS are qubyaay Peers oe Pasi 1 nok cuopect Hh OWT ‘A i me, the contra i liment reporting of inco! : ‘ : ae Toei by deducting from the selling price the cost or assumed mortgage whichever is higher. y leeen” ps 5. Ordinary assets include those which are held prima: i f to customers in the ordinary course of the business equipment used in business operations. : 6. Capital losses are deductible only to the extent of the gain. 7. If the property is acquired through inheritance, the cost b the recipient is the acquisition cost of the previous owner, Finy at +o Hm oF inher tana | donanen ‘ J 8 The gains from sale of securities held by dealers in se ordinary income subject to normal tax. | 9%. Stocks that are traded in the local stock market are subject stock transaction tax based on the sales price irrespective 0 or loss sustained by the taxpayer. a 10. When a taxpayer provided a buy a capital Property an AE WOL everaod in business were 6% final tax cr no PeA disguised sale is a sale or related parties with intent of partly. The gain or loss on sale of Ppartn si partnership is a capital asset canta If the property sold is not subject to m : “aa is usually the selling price. ‘© mortgage, the contract price _ Gains from wash sales are taxable and losses from wash sales are-deductible. not Acduchblie There is wash sale if within a 61-day period, a taxpayer sold its 1,000 X Company’s common stocks and subsequently purchased 1,000 X Company’s preferred stocks. DY vadh cal — cd of chon are diet. Ifa government owned corporation sells a real property, only the selling price is the basis of the tax. The NOLCO is applicable for three years from the year of operating loss and can be deducted from ordinary income and net capital gain. The ofigina) issue by a corporation of its shares of stock above Par value is subject to capital gains tax. mM gain or \uc - ; a : Dealers in securities are not liable to the stock transaction tax, | All sales of shares of stock of a non-dealer im i" 5 f 1%. Subject to stock transaction tax of He as deel titer tou tr havoc On Cl: The paymeif’Gt SBE tansaction G income tax of 5% and 10%.J 2. A sale or exchange o t = ela 4 eRe act, Write True if the sta incorrect. tement is ous order, if sold is hef sul , religi , Land owned by re! oh a ee ae in partnership is ¢ transaction. ‘A short sale is effected when a speculator sell secu ovis. dow sok ooh 2. A deductible loss may be incurred if the treas subsequently reissued for a consideration less than ts é y the gover Copytight is an exclusive right granted by ge eee patent Liquidating dividends in general are not taxable if Bi represent return of investment. Issuance of a corporation of its bonds at a premium capital gain. — ae All sales of land are subject to a final tax of 6% 4. selling price or fair market value, whicheve: lord us an Oh eubyect “ P hota! tex Sale of real Propert, r ack ‘ 1 Y of national is © creditable withholding tax. —itenment aa r is higher.Non’ Capital loss of the: Taxable gain of t Refundable. |, for income taxation purposes, y capital asset of a manufacturing busine: Work in process ending inventory 8 Investment in equity securities = Factory building d, Offic quipment } Which of the following is a capital asset? a. Inventory for sale p. Real property held for rent \we wn words (60) @ Equipment used in busi @ Investment property — § 4 Which of the follow is @ Ordinary loss is fi pital gain. b. Capital loss is deductible from capital gain. @ Dealers in securities are subject to stock tran: d. Net capital | is juctible from the succeeding year’s capital gain of an individual taxpayer. ® Itrefers to an exclusive right g1 to authors and composers. & Patent b. Franchise @ Copyright ~ Goodwill *h of the following may result to capital gain or le i of investment in bonds + — | Receipt of liquidating divideOnly state! Both statement: d. Both statements are n er disposed of his principal 8. If an. individual taxpay lacement a smaller : a replac P1,000,000 and acquired as a cis subject to 6% ca house and lot for P750,000, on 1900-380 : Perec mteaAinepce-” 4g” SF 2. 75% of the selling price. c. 100% of the selling price. , @. 100% of the purchase price of the new residential ROWsa 9. The sale of real property classified as capital asset shall be) 6% of , é a. selling price, where the zonal value is 110% of selling price! : b. zonal value, where the selling price is 110% of zonal value, (G. selling price, where the zonal value is 80% of the selling p d. zonal value, where the zonal value is 80% of the selling p 3. 10. If the real property sold is classified as inventory with a sell of P3,000,000 and zonal value of P4,000,000, the withholding tax is a. 6% of the selling price b. 6% of the zonal value. 5% of the selling price. d. 5% of the zonal value. 4. 11. A dividend received b pide y stockholders upon corporate dit Liquidating dividends, - Terminating dividends. ¢. Stockholders’ dividends, d. _ Retirement dividends,aS a oer jetter that contai aa ; real estate business that 1 assify its real estate properties ; ordinary asset. ~ x capital asset. abandoned asset. q_ service asset. ¢ following rules shall be observed when { " : oe agincd by a corporation, except, @ capital gain or loss is se Capital gains and losses are recognized to the extent of its full amount. .~ ; b. Capital losses are deductible only to the extent of capital gains. ~ ¢ Net capital losses are not deductible from ordinary gain or income but ordinary losses are deductible from capital gains. ~ & only 50% of gain or loss is reportable if the asset sold was held U for more than 12 months. ¥ 4, Which of the following rules shall be observed on securities becoming worthless for purposes of income taxation? venthe securities are ascertained worthless and written off. 7 b. The taxpayer owning the securities written off should not be bank or trust company c. The written off amount is a capital loss. a Q All of the above. 4 Sales of stocks of a domestic corporation traded through a locall Stock exchange are subject to a @ percentage tax of one half of one percent. / . final tax of five percent if the net capital gain is not over P100,000. « © final tax of ten percent on any am @. percentage tax of one fourth of one percent. dentified, the following rules are ount in excess of P100,000.x * Ithe stock cannot be properly i ee " @pplicable in the determination of the cost of TNS | cept * The cost to be assigned oe6 Which of the following sale results to a capital g in ITR? Sale of land forecl Sale of interest in a pro! c. Sale of shares of stock n' sed by the bank * é < fessional partnership ~ ot traded in the stock ded in the stock mar d. Sale of debt securities tra 4 ; 7. Sales of investment in stocks of a dom aaa ’ A r through local stock market are subject to A ; a. 5%. qT b. 10%. 5 2 ¢, 10% on the net gain not over P100,000. . @ 5% on the net gain riot over P100,000, and 10% om : the first P100,000. ~ : i 8. If the proceeds from the disposition of principal residene . utilized in acquiring or constructing a new principal resi In : capital gain is not subject to tax if the ; Id ; a. Acquisition or construction of the new residence is Pr i months. ~ Si i b. Commissioner is notified within 30 days from Le disposition of the taxpayer’s intention to avail of) exemption. .~ Tk ©. Historical cost or adjusted basis of property sold is @& to the new principal residence. b. @ Alll of the above Pr The cost of the new principal B, & Gost ofthe old Bet mY oethe pu . Percentage of the cost of the ly ; th € Cost of the old residence oon” ce ao - the new principal residence 7 PINS additional cost oF All of the above.Bsahoure of the ex undeveloped Men ed properties _ mount of ordinary assets 13,000,000. 4 00,000. p Plt poem 7-8 Classification of Assets me Enterprises presented the following assets: a iperest in partnership + P1,000,000 de raw lands + 100,000 in prceeds of expropriated real property + 2,000,000 Supplies inventory 200,000 tea land and building used in business 5,000,000 © BG teamount of capital assets would be es TF 2. P1,100,000. (c.) P3,100,000, 40% ove 5, P1,300,000 @ 4,900,000, 300 sue Problem 7 - 9 Change of Purpose a Ba trader, purchased one-hectare land intended for investment purposes for P2,000,000. After 10 years, he decided to subdivide 90% of iit land for business purposes and the 10% is used to construct his Marehouse. One thousand square meters of the subdivision are used as a Subdivision road. ! Wper subdivided lot is sold for P100,000 per 200 square meters, how Much is the ordinary gain from sale of land? & P4,500,000 | c. P2,700,000 5. P4,000,000 @ _ 2,200,000 * Based on the above transaction, how much is the remaining; f exchange. to P200,000 at Facil the property is capital : 2 thats higher An 200,000 given away has fi capita the propert @ noe Oe cet iierited...% the has fi than P200,000 when it ine ee esata iat is lower than P200. given away has d. There is capital loss date it was received as in Kind a hange Solely WEE ication Races authorized capital stock of P10,000, ‘eniz par value of P100 per share. The subscriptions of the incorp as follows: No, of shares s' ibed Amount paid Incorporators 15,000 P150,000 B 5,000 c 2,000 D 2,000 125,000 E 1,000 100,000 Total 35°00 By way of a deed of assignment, Mr. A transferred to the co pora Parcel of his land with a fair market value of P600,000 in ordes pay his unpaid subscriptions. How much is the taxable Jand was acquired by A for only P50,000> ee 0 ©. P450,000 400,000 d. P600,000 Problem 7 ~ 13 Determination of Be Aliandro Ciencia sold his capital asset for a sales price of P le sale was Subject to 10% agent commission, The capital Peet By Mr Ciencia for P200,000 excludi insta ‘surance cost of P20,000, : a © cost and expenses deductible f : opera cin. om the sale is com b. P220,000. ah specs Oaes re P270,000. Cost and Expensesporation a er to fully unt if the 7 Dealings in isthe amount of the 1,500,000 t P ‘300,000 jem 7- 15 Special Rules oe mired a capital asset (Personal wet poration when the market v a ofdonation, X Corporation sold the cl #00, 000 &. P-50,000 i p 70,000 d. P 35,000 poblem 7-16 Ordinary vs. Capital Gain/Loss ir Flo sold his personal car for P700,000 which he previously fo years ago for P1,000,000 with an estimated useful life of jow much is the reportable capital gain (loss) on the sale of the cau (P300,000) ©. P100,000 jan ®)P 50,000 d. P-200,000 ex +4 30 i poblen 7-17 Holding Period Le WOR aah fpepital asset of an individual was eoqtifed fee) Aue aan Subsequently, this owner died and the capital asset is transferred to a rligious organization when the fair market value was P120,000. The later sold the capital asset for P200,000 after holding it for 2 years. h is the amount of reportable cay Theamount of reportable capital gain would be a P 40,000. ¢: P 80,000. ord b. P 50,000 d@) P100,000. (\09) e 2 Problem 7 - 18 Taxable Income Theindividual taxpayer reported the following: : Yearl __Year2 Netincome from business 200,000 P300,000 “pital gain for asset held more than one year 50,000 40,000 pital loss for asset held less than one year 40,000 10,000, Ti taxpayer should report combined taxable income before personal Semption of ah yel 4 en ie pest Year 2 a fi 0,000 P330,000 (rove 95 P300,000 (Yo csi) rae 295,000 si P310,000 ‘‘h If X is an individual. how muc! before sonal exemption? a. P95,000 b. P90,000 2. IfX is corporation, how mu (5 90,000 Problem 7 - 20 C reported the followi ss Carry-Over ‘d losses for the years 1 Year| Net Capital Lo! ing incomes ant Ordinary taxable income Short-term capital loss Long-term capital gain Long-term capital los: Short-term capital gain 1. If C is an individual taxpayer, the year 2 combined ta before personal exemption is a. P330,000. ¢) P270,000. b. P280,000. ‘f P170,000. If C is a corporation, the year 2 combined taxable income is a. P330,000 c. P270,000) (iim (@) 280,000 a. P170,000. Problem 7-21 Net Taxable Capital Gain Jp aos to his business as construction materials dealer, iad the following capital asset transactions in 200x: Sold ; Acqu Capital Asset ____Date Selling Price De : jewelry Babi ox P 80,000 5/10/0x % 40 rah Reffigerator 9/5/0« 8,000 *3]9/0% ‘ 12/5/0x 12,000 1/10/0% net ae capital gain of Mr. Espiritu in 200x is Bi ¢. P27,000. ,000. d. P26,500.jem 7-23 Mpital gains from sale of inve Pe gexchange s P207,500, net of final 2, 2,500 y P17,432 b plem 7-24 Stock Transactions following capital stock transactions on sh: met pen individual taxpayer: ee ose ae Cost Selli March P100,000 —P150,000 sune 150,000 160,000 September 200,000 240,000 November 120,000 150,000 [taxseturns were filed and paid on_prescribed dates, how much capital pig: should be reported within30 days from November oe @ PI,51 “ec. P6500 | | U~ho~9 4, P3,000 d. P8,000 ve Problem 7-25 Dealer in Securities ACompany sold 100,000 SMC equity shares for P1,000,000. The related ‘sis of the said securities are as follows: Acquisition cost P900,000 Brokerage fee 40,000 000- > Go 1 IfA Company is a dealer Ae and sold the securities through the stock market, the income tax dué would be a ie c. P 3,000. P 5,000. d. P 500. 2 IA Com 20f. f!% arid ald, te: occu pany 4 Mor 2deaier“in securitie c through the stock market, the stock transaction tax would be Pico 8 3,000, P 5,000. eat 4 Compan {S hot a; October H Market values 20% Marisa would like to sell the shares of sole pe of 1% based on sales price will be paid a it a the pe the stock is sold in the stock exchange. To avo Re decided to sell the shares of stocks directly to the buye Would Marisa’s decision result to a better profit? At what a fol a. Yes, P500 increase in profit. , b. Yes, P400 increase in profit. 20 No, P400 decrease in profit. ee No, P200 decrease in profit. a Problem 7-27 Net Capital Gain ; 5, During the year, the following are the recorded stock transact a Corporation of its own shares of stock: ; Pifor (2) Total shares originally issued, 1,000 shares of P100 par old share, sold at P120 per share. (2) Total shares retrieved 250 shares at cost of PL25 per share. Lod (3) From the total shares retrieved, 100 shares were sold outs f market at P150 per share. — (4({ (uance t a are be the net capital gaim-before tax for the year? hs : , ¢. P20,000 b b. P21,250 a eC) sa 208 Problem 7-28 — Wash Sales prs probl Marjorie Corpuz is an i, Cor share holdings acquired at pian x Corporation. In 200A she are P120,000 classified ae Raia eee: share or a total invest share; Per sh 2005 Transactions: : i January Recei o ; He March Sold °f X Corporation for pag per i it ies would es the net capital gain in M +b. P 8,000 larch?supposing that all of the 5 Jecember 200B at P130 per (loss) in December 200B? ) (P. 3,000) G (P18,000) ES blem 7 - 29 Cost of the Remaining Shares. jna’s investments in equity shares of: Stin re ing transactions: 1g Corporation 200A Particulars ar.10 Purchased 800 ordinary shares —Amount P 80,960 4p.20 Purchased 1,500 ordinary shares 161,700 a May30 - Received 10% stock dividend (the fair market value of stock is P95 per share) es June 1 Sold 2,000 ordinary shares 240,000 Mona specifically identified that the April 20 batch of shares was first ee old because it has higher cost compared to March 10. | How much is the gain on sale of the investments in equity shares? ock a. P27,700 a /&) P46,100 pees (oo b. P29,680 Cav P48,760 Tau ut? ow 2 How much is the cost of the remaining shares? & P30,360 ee b. P32,340 ‘d. P51,940 Poblem 7 "4 Share of Stock -30 Corporation’s Own “corporation issued $000 of its common shares with P20 par value per 006 : ; gat 8 P25 per share- Of the 5,000 comm eS Were reacquired for P21 per share and eventually reissued for P23 share, al issuance? 1 re How much is the capital gains on the origin 1 isan a c. P25,000 @F-0- shares?Five hundred (500) capital share. Nine hundred (900) treasury d share, and the HS ae hundred (100) shares wer ; data and tre How much is the net taxable gain of the above r Mi P18,000 F Fee bod ( P16,000° P ; Problem 7 - 32 Installment Sales of Shares of Sto x In 200A, Mr. Rey, an owner of shares of i in 3 5 corporation, sold outside stock exchange 1,00( ie a a or Cost of P120 per share for P180 per share under the fo v iat P36,000 down payment and the balance is collectible in ff cla annual installments. val The capital gains tax due for year 200D would be Thi a. P960. c. P720. x e P800. d. P360. 5. Problem 7 - 33 Liquidating Dividend Pro On October 31, 200C, X received P120,000 liquidating dividene In 2 s Philex Mining Corporation for his 10,000 shares invested at PL He | share which was acquired on January 31, 200A ie sale How actu hes 30,000 +S0 = (0000 Froblem 7-34 “Basis of New Resi Manwong is a resi: Cette Mankayasntence and Capital Gains 1 for P4,000,000 which “ace ect. He sold his fam complied with was previ ith: ail : ously ac, spent P2,500,000 in fe BIR requit Scquiring new familyP9,000,000 m7-36 Capital Gains Tax (Real ae qrAugust 15, 201A, Mr. Tandingan sold a 500 square m reciden jind for P300,000. The land was acquired in 199A for P200,000 an assified as capital asset. On the date of sale, the fair market value as _ sown in the real property declaration is P250,000 and the assessed wie amounts to P75,000. The zonal value is P700 per square meter. The capital gain tax is # a P 3,750. c. P17,500. (ow? oe » P12,500. @ 21,000. Ye fa Problem 7-37 Basis of New Residence 200A, Mr. Del Rosario acquired his principal residence for P6,000,000. Hesold it to Mr. De la Cruz for P12,000,000 in 200D. Within 30 days, tewrote the BIR for tax exemption because he intends to use the entire Sles proceeds to purchase a new principal residence. Yow much is the basis of the new residence for taxation Huns if he tually acquired it for P15,000,000? r b P 6,000,000 c. P12,000,000 ! & P 9,000,000 a. P15,000,000 > 3 3 ZL z blem7-38 Real Estate Transactions ® following are the transactions of Ruby pertaining to sale of real Perties for the year 200x: ial Sale e for her of vacant Jot used as oe é ,000. This was acquired 2 years ago at P200, 500, of her residential, lot for P1,000,000, the 2onal %) Sate , “leis P1,200,000. This was purchased 3 years 2 Would be her final tax. P 60,000 eeof Real Property ane i i yuse and lot Pe 2 co re oy “he sala property ae ac Bee tee aiyeat valve of P2,000,000. The (DST) is paid by E : 4 If the property is a capital asset, how much is the should be paid to the BIR? Re. 500 150/000 (d.) P187,500 4 De iOte 0) t OM¥ LTP) + (Y : 2. If eet is vhs ordinary assef, how much is the 7; 1 should be paid to the BIR with the application of tax m ¢ principle? 7 a. P492,500 ©) P217,500 1 b. P367,500 ‘d P192,500 Problem 7-40 —Creditable Withholding Tax and Income & Camella Homes, a realty corporation, sold the following real during a taxable year: y Sales 4 houses at a cost of P200,000 each 3, 2 houses at a cost of P1,200,000 each The spPerating capenses incurred during the year is P2,800, a much is the creditable withholding t il ; Payable of Camella Homes? Poy 0s, conan reditable withholding tax Income tax still due and a. P240,000 P460,600N e 90,000 P370,000 c. P400,000 P. ¥ 5. @ P330,000 300,000 P270,000 Problem 7-41 Cre, Biba : Wit ee City Government See and Income ion (a member $f HLURB) ata araeie Sioa How much is Goldrich: a the creditable erfiabilities ‘il shareholders’ equity yumber of outstanding shares 300,000 yalue per share P10 P25 fair market value per share P12 P30 The net assets of E Co. with fair value of P8,000,000 are transferred to V (0. for a corresponding 250,000 V Co.’s shares. |. The nondeductible loss of Co amounts to fa) P2,500,000 c. P 500,000 P1,500,000 Peeons d. (Io ¥.10Gr) = 4D - Gow = (r—a3 ite cost fr Sadis Parco’ share to ¥ Comeala be a. PI5,000,000. © c. P 8,000,000. E) P 9,000,000 d. P 3,000,000. | The taxable gain of Y Co. would be @ —P1,750,000. - tonkmynit gain . P 630,000. b. P1,120,000. DE ee ' Assume that Mr. Cruz, a shareholder of E Co. was asked to Surrender his 20,000 shares which he purchased for P700,000, how much is his gain (loss) not recognized? _ & — P400,000. ! (P200,000). 300,000, P- 0 - = 0-300 = f J S tesume AX, ft? Gras eubeeeidntly sold 20% of his B Co's AAvestment, how much is the gain (loss) on sale? (P20,000) c. P 20,000. aa dP 40,000. ‘sei Problem -y 002 X 0 J- = som w PB =17000= 7000 ¥. UW = (OD 7-43” Creditable Withholding Tax Corporation, a real estate developer and a mProbl Ordinary e, Capital Gains ne Tneoransactions of Miss The Ne ica pertains to the transactions for year 200B: Total net sales from his trading business Sale of vaca arehouse for her trading bus Sale of vacant lot used as open w. io Piso ea Re This was acquired two years ag0 4 CONS) ars ago, P800,00 Do Sale of residential house and lot - acqu’ residential ged to acquire her new of the proceeds was u : omnplied Senin pr and lot. All pertinent BIR requirements were comp th Sale of her personal computer. He bought this for her personal Use, on 2 years ago at cost of P20,000. z are Sale of personal car, acquired 3 years ago at P50,000 f p3 P2 Questions: a 1. What is the ordinary income/gain of Miss De Guzman fora a 2. How much is the supposedly final tax taken from the e Miss De Guzman transactions for the year 200B? ie All Problem 7-45 FIFO vs Moving Average Galam’s common stock investments in Philex Mines are as follo Qu gai December 15, 200A: Purchased 100 shares at P100 per share. wit con February 24, 200B Purchased 300 shares at P120 per share. August 20, 2008 Received a 15% stock dividend Re a Pecember 15,2008: Sold 350 shares at P200 per share. en Required: © ao Dieting ete due and payable for the 350 Sh P7, oo are not traded in stock exchange Pri ]O Method and (b) Moving Average Sie Cor a mpute the annual tax due of Missceived P50,000 from Mr. « 3 yet value of P3.00 per share invested P20,000 for 100 cor which was ascertained insolvent, peqired: Compute the net capital gain or point problem 7 ~ 48 Capital Gains Tax vs. Normal Tax {in December 31, 200B, Trinidad Wood Corporation sold its land gected warehouse to the Benguet Provincial Government at sales price of | 7000,000. The land was previously acquired by Trinidad for ,000,000 and the warehouse has a remaining book value of P200,000 the date of sale. Trinidad’s books of accounts shows the following data dated to its 200B operations Sales. P6,000,000 Cost of sales 2,000,000 dlowable deductible expenses 1,000,000 Question: Trinidad intends to pay the sale of the land at its final capital tins tax of 6% instead of opting to pay normal tax with a creditable wihholding tax of 6%. Is Trinidad correct? Show your supporting computation. Moblem 7-49 Tax Exemption m Corporation sold the residential building used as housing Puulege of its employees for P10,000,000. The building was previously gusttucted at P8,000,000 with recorded accumulated depreciation of °00,000. The corporation wrote the BIR to avail of the tax exemption lege because it plans to use the entire sales proceeds to construct a “residential building amounting to P10,000,000. ition: Can Loakan Corporation avail of tax exemption? Justify your ver, r Mien 7~s0 woLco vs. NCLCO lowing ordinal 1 ansive Probie” Comprehe! ing incomes : Problem 7 - 51 reported the following Mr. Avelino Cayat calendar year 200B: te a al fees a eee on notes receivable (profession) Winnings in a raffle Dividend income Capital gain (loss) on sal Residential land Personal car Jewelry Refrigerator Loss on sale of personal The following tabulations are the particulars on the capital ass Je of capital assets: | furniture to his brother 200B: Capital Assets: Date Sold “Date Purchased _Selling Price nee Residential land 2-15-2008 12-20-200A P130,000 Personal car 1-15-200B 11-25-200B 105,000 =o Jewelry 7-10-200B 5-12-199Y 80,000 Mr. Refrigerator 9-20-200B 7-15-199X 4,000 app Furniture 9-30-2008 10-30-200B 10,000 his Required: Compute the amount of net capital gains of Mr. Req shall be reported in his 200B income tax return ‘1 pechiers 7-52 Capital Asset Transactions 2. e following data are eveilable from the records of S: 3 ar F Business income —_P300,000 Pans toe —Year6 _ Year7 } Business expenses 340,000 30) 7300.00. oo Capital gain (loss) z ,000 450,000 570,000 4. fi Short-term 50,000 eee ps (40,000) 30,000 (0,000) 10,000 (100,000) Bh Required: Com; Shai mute the : ee adidas as « taxable income if S is a/an ble i bos meome before personal exemption). Problem 7-53 ordi; In 200A, Toyota Philippine pact vs. Capital Asset €S sold a La; is for PS,000,000 by ing gtctie eeeassuming that the Land Cru 4 Tuch is the reportable gross jem 7 - 54 Various ee alinta’s capital asset transaction Gave P10,000 option money to buy a she exercised. Invested P500,000 in San Pedro Corporation’s bo of 30% which was retired after 9 months for 120, Received P50,000 from Mr. Chu for 20,000 common shares with a market value of P3.00 per share which she delivered immediately. The cost per share was P2.25. i Invested PS50,000 for 100 common shares in Philippine Airlines which wa: tained insolvent, Required: Compute the amount of net capital gain Problem 7-55 Sale of Family Home Mr, $ sold his family home costing P1,200,000 for P3,000,000. He aplied for tax exemption. He spent P2,000,000 for the construction of hisnew residential home. Required: Compute the following: 1 2 4 lithe tax exemption was granted how much is the capital gains tax? Based on No. 1, how much is the basis of the new residential home? Ifthe tax exemption was not granted, how much is the capital gains tax? 4. Based on No. 3, how much is the basis of the new residential homep Problem 7 -56 Wash Sales ee I Thad the following transactions in ABC Corporations es classified as capital asset: Particulars Ee 10, 200x Purchased 9,000 shares at Pou F Pe, 22 200x Purchased 5,000 share at FX! Fey 19: 200x Purchased 4,000 sha 14, 200x Sold 8,000 shares §41g t P60 per 5. Ifon Feb. 25, Mr. 1 sold 4,000 shares a! pet the capital gain (loss)? Reorganization : Corporate va co. shares. which fA Co. to B Co,, he roblem 7 - 57 y a shareholder, owns 100,00 share. As a result of a merger 0! the following shares : Number of Par value/’ s share P20 30 Ordinary shares Preference shares Required: ; NATU 1. Determine the gain or loss not to be recognized on the ext : aie In get 2. Determine the basis of the ordinary and preferer eh respectively. ee gross 3. Assume that the ordinary shares were sold for P25 per measey-! preference share for P60 per share, determine the net g Deduc 4. If the shares were sold in the stock exchange, Castanec percentage tax. reason 5. If the shares were sold not in the stock exchange, equita capital gains tax. Ine. us. U 6. Choosing the lower tax betw: advantage. ehween 4 and Sa The ta: entitle: Prot - 2181), Kroblem 7-58 Corporate Reorganization ei Pian bonne a meter. Mr. X transferred his A Co. shail ee: 80,000 in exchange for the following: 4 ! records B Co. ordinary shares wit th Land with FMV of pes The pr ay le Required: expe a Determine the taxable gain on the _ Determine the basis exchange,