Test Bank for TAXATION 1 – Income Taxation Exam |
Latest Questions & Correct Detailed Answers (in
Bold) (Ultimate Guide for YR. 2026/2027)
Table of Content
➢ Individual Taxpayers
➢ Income Taxation
➢ Corporation
➢ Partnership
➢ Estate & trusts
➢ Fringe Benefits Tax
➢ Deductions & Exemptions
➢ Capital Assets
➢ Instalments Methods
➢ Filing, Penalties & Remedies
INDIVIDUAL TAXPAYERS
1. The National Internal Revenue Code of 1988 is
A. RA 9337
B. CA 466
C. RA 9504
D. RA 8424
2. Which of the following statements is not correct?
A. An individual citizens of the Philippines who is working and deriving income
from abroad as an overseas contract worker is taxable on income from sources
within and without the Philippines.
B. A seaman who is a citizen of the Philippines and who receives compensation for
services rendered abroad as a member of the complement of vessel engaged
exclusively in international trade shall be treated as a resident citizen.
C. A non- resident citizen who is not engaged in business in the Philippines is treated
as non-resident alien who is not engaged in business in the Philippines
D. An alien individual, whether a resident or not of the Philippines, is taxable
only on income derived from sources in the Philippines
3. Which of the following statements is not correct?
A. In the case of married individuals, where only one of the spouses is deriving gross
income, only such spouse shall be allowed the personal exemption.
B. In the case of married individuals, the additional exemptions maybe claimed by
only one of the spouses
C. As a rule, the husband shall be the head of the family and proper claimant of the
, 2
D. In the case of legally separated spouses, additional exemption maybe claimed
by the spouses who has custody of the children but shall not exceed four(4) for
each spouse
4. A resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
5. A non-resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
6. A resident alien is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
7. A non-resident alien is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
8. The following taxpayers are allowed to claim additional exemptions, except
A. Resident citizens
B. non- resident citizens
C. Resident aliens
D. Non-resident aliens
9. Which of the following statements is not correct?
A. If only one spouse is deriving taxable income, only said spouse may claim the
additional exemption
B. If both spouses earn taxable income only one of the spouses can claim additional
exemption
C. If legally separated from the spouse, the husband can claim the additional
exemption
unless he waives the right in favor of his wife
D. An unmarried individual with a child out of wedlock can claim a personal
exemption as a head of the family plus exemption
10. A citizen of the Phils. who works and derives income from abroad is a resident if he stayed
outside the Phils.
A. For less than 180 days
B. For more than 180 days
C. For 183 days or more
D. For less 183 days
, 3
11. A citizen of the Phils. Who works abroad and whose employment requires him to be
physically present abroad most of the time during taxable years A. Taxable on
income within and without the Phils.
B. Taxable on income from without the Phils.
C. Exempt from income tax
D. Taxable income from within the Phils.
12. A citizen of a foreign country is considered a non-resident alien engaged in business in the
Phils. If he stayed inside the Phils.
A. For 183 days or more
B. For less than 183 days
C. For more than 180 days
D. For less than 180 days
13. Which of the following dependents is not qualified to entitle a taxpayer additional persona
exemption?
A. Recognized natural son who celebrated his 21st birthday during the taxable year.
B. Legitimate natural son, 21 years old who got married on December 31, of the year.
C. Legally adopted son, 21 years old son who became employed December 30, of the
taxable year.
D. Widowed mother, who celebrated her 59th birthday during the taxable year.
14. For income tax purposes, which of the following is considered head of the Family? A.
Married individual who has dependent minor child.
B. Married but legally separated individual with a dependent mother who is 59
years old
C. Single individual with a common law life
D. Married individual even if he has no children
15. Which of the following dependents will qualify a single taxpayer as head of the family?
A. Taxpayer’s brother, 22 years old, unemployed, unmarried, living with him and
dependent upon him for support
B. Taxpayer’s sister, 18 years old, unemployed, unmarried living with parents, but
dependent upon him for chief support
C. Taxpayer’s illegitimate son, 12 years old, unemployed, single, living with him
and dependent upon him for support
D. Taxpayer’s godchild, 10 years old, dependent upon him for chief support
16. Mr. A with a dependent minor legitimate child became a widower in January of 2009. In
February of the following year, he got married to Ms. B and subsequently in November of
the same year, the latter gave birth to three (3) boys. For calendar year 2010, Mr. A’s basic
and additional personal exemption is:
A. P 75,000 B. P100, 000 C. P125, 000 D.
P150, 000
17. A German citizen residing in Germany, married is doing business in the Phils. His country
allow non- resident Filipino with income from Germany a basic personal exemption of
P30,000 as head of the family, P40, 000 as married and P15, 000 as single. The allowe
personal exemption he can claim is?
A. P50. 000 B. P30, 000 C. P32, 000
D. P40, 000
, 4
18. Which of the enumerated taxpayers below can claim personal exemption only if there exist a
reciprocity clause/law between the Philippines and his country/
A. Non-resident
B. Resident alien
C. Non-resident alien not engaged in business in the Philippines
D. Non-resident alien engaged in business in the Philippines
19. A legally married couple had the following data in year 20010?
A. Two qualified legitimate dependent children
B. Two dependent nephews
C. One illegitimate child of husband
D. One of legitimate child died in December 2010
E. Both spouses are gainfully employed.
The claimable personal and additional exemptions of the couple:
A. H-P 50, 000, W-P 125, 000
B. H-P 100,000, W-P 50, 000
C. H-P 100, 000, W-P 75, 000
D. H-P 150, 000, W-P 50, 000
20. A, who became a widower in February of taxable year 2010 had the following dependents:
A. Two legitimate children
B. Recognized natural child with current common law wife
C. B, his common law wife
D. Illegitimate child with another woman
The total basic personal and additional exemption in 2009 is:
A. 150, 000 B. P100, 000 C. P125, 000 D. P75, 000
21. A married, earned P225, 000 (net of P40, 000 w/tax) compensation income from employment
from July to December 2010. He has a legally adopted child as qualified dependent and paid
P3,000 as health and hospitalization insurance premiums. For 2010, he can deduct premiums
for health and hospitalization insurance of:
A. P3, 000 B. P2, 400 C. P1, 200
D. P0
22. Using the preceding number, his personal and additional exemption is
A. P40, 000 B. P75, 000 C. P77,400
D. P78,000
23. Which of the following individual taxpayers cannot avail of the allowed deductions for
health and hospitalization insurance premiums?
A. Non-Resident citizen
B. Resident alien
C. Non-resident alien engaged in business in the Phil.
D. Non-resident alien not engaged in business in the Phil.
24. Taxable on income from all sources within and without the Phil.
A. Resident citizen B. Non-resident citizen C. Resident alien D. Non-
resident alien
Latest Questions & Correct Detailed Answers (in
Bold) (Ultimate Guide for YR. 2026/2027)
Table of Content
➢ Individual Taxpayers
➢ Income Taxation
➢ Corporation
➢ Partnership
➢ Estate & trusts
➢ Fringe Benefits Tax
➢ Deductions & Exemptions
➢ Capital Assets
➢ Instalments Methods
➢ Filing, Penalties & Remedies
INDIVIDUAL TAXPAYERS
1. The National Internal Revenue Code of 1988 is
A. RA 9337
B. CA 466
C. RA 9504
D. RA 8424
2. Which of the following statements is not correct?
A. An individual citizens of the Philippines who is working and deriving income
from abroad as an overseas contract worker is taxable on income from sources
within and without the Philippines.
B. A seaman who is a citizen of the Philippines and who receives compensation for
services rendered abroad as a member of the complement of vessel engaged
exclusively in international trade shall be treated as a resident citizen.
C. A non- resident citizen who is not engaged in business in the Philippines is treated
as non-resident alien who is not engaged in business in the Philippines
D. An alien individual, whether a resident or not of the Philippines, is taxable
only on income derived from sources in the Philippines
3. Which of the following statements is not correct?
A. In the case of married individuals, where only one of the spouses is deriving gross
income, only such spouse shall be allowed the personal exemption.
B. In the case of married individuals, the additional exemptions maybe claimed by
only one of the spouses
C. As a rule, the husband shall be the head of the family and proper claimant of the
, 2
D. In the case of legally separated spouses, additional exemption maybe claimed
by the spouses who has custody of the children but shall not exceed four(4) for
each spouse
4. A resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
5. A non-resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
6. A resident alien is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
7. A non-resident alien is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
8. The following taxpayers are allowed to claim additional exemptions, except
A. Resident citizens
B. non- resident citizens
C. Resident aliens
D. Non-resident aliens
9. Which of the following statements is not correct?
A. If only one spouse is deriving taxable income, only said spouse may claim the
additional exemption
B. If both spouses earn taxable income only one of the spouses can claim additional
exemption
C. If legally separated from the spouse, the husband can claim the additional
exemption
unless he waives the right in favor of his wife
D. An unmarried individual with a child out of wedlock can claim a personal
exemption as a head of the family plus exemption
10. A citizen of the Phils. who works and derives income from abroad is a resident if he stayed
outside the Phils.
A. For less than 180 days
B. For more than 180 days
C. For 183 days or more
D. For less 183 days
, 3
11. A citizen of the Phils. Who works abroad and whose employment requires him to be
physically present abroad most of the time during taxable years A. Taxable on
income within and without the Phils.
B. Taxable on income from without the Phils.
C. Exempt from income tax
D. Taxable income from within the Phils.
12. A citizen of a foreign country is considered a non-resident alien engaged in business in the
Phils. If he stayed inside the Phils.
A. For 183 days or more
B. For less than 183 days
C. For more than 180 days
D. For less than 180 days
13. Which of the following dependents is not qualified to entitle a taxpayer additional persona
exemption?
A. Recognized natural son who celebrated his 21st birthday during the taxable year.
B. Legitimate natural son, 21 years old who got married on December 31, of the year.
C. Legally adopted son, 21 years old son who became employed December 30, of the
taxable year.
D. Widowed mother, who celebrated her 59th birthday during the taxable year.
14. For income tax purposes, which of the following is considered head of the Family? A.
Married individual who has dependent minor child.
B. Married but legally separated individual with a dependent mother who is 59
years old
C. Single individual with a common law life
D. Married individual even if he has no children
15. Which of the following dependents will qualify a single taxpayer as head of the family?
A. Taxpayer’s brother, 22 years old, unemployed, unmarried, living with him and
dependent upon him for support
B. Taxpayer’s sister, 18 years old, unemployed, unmarried living with parents, but
dependent upon him for chief support
C. Taxpayer’s illegitimate son, 12 years old, unemployed, single, living with him
and dependent upon him for support
D. Taxpayer’s godchild, 10 years old, dependent upon him for chief support
16. Mr. A with a dependent minor legitimate child became a widower in January of 2009. In
February of the following year, he got married to Ms. B and subsequently in November of
the same year, the latter gave birth to three (3) boys. For calendar year 2010, Mr. A’s basic
and additional personal exemption is:
A. P 75,000 B. P100, 000 C. P125, 000 D.
P150, 000
17. A German citizen residing in Germany, married is doing business in the Phils. His country
allow non- resident Filipino with income from Germany a basic personal exemption of
P30,000 as head of the family, P40, 000 as married and P15, 000 as single. The allowe
personal exemption he can claim is?
A. P50. 000 B. P30, 000 C. P32, 000
D. P40, 000
, 4
18. Which of the enumerated taxpayers below can claim personal exemption only if there exist a
reciprocity clause/law between the Philippines and his country/
A. Non-resident
B. Resident alien
C. Non-resident alien not engaged in business in the Philippines
D. Non-resident alien engaged in business in the Philippines
19. A legally married couple had the following data in year 20010?
A. Two qualified legitimate dependent children
B. Two dependent nephews
C. One illegitimate child of husband
D. One of legitimate child died in December 2010
E. Both spouses are gainfully employed.
The claimable personal and additional exemptions of the couple:
A. H-P 50, 000, W-P 125, 000
B. H-P 100,000, W-P 50, 000
C. H-P 100, 000, W-P 75, 000
D. H-P 150, 000, W-P 50, 000
20. A, who became a widower in February of taxable year 2010 had the following dependents:
A. Two legitimate children
B. Recognized natural child with current common law wife
C. B, his common law wife
D. Illegitimate child with another woman
The total basic personal and additional exemption in 2009 is:
A. 150, 000 B. P100, 000 C. P125, 000 D. P75, 000
21. A married, earned P225, 000 (net of P40, 000 w/tax) compensation income from employment
from July to December 2010. He has a legally adopted child as qualified dependent and paid
P3,000 as health and hospitalization insurance premiums. For 2010, he can deduct premiums
for health and hospitalization insurance of:
A. P3, 000 B. P2, 400 C. P1, 200
D. P0
22. Using the preceding number, his personal and additional exemption is
A. P40, 000 B. P75, 000 C. P77,400
D. P78,000
23. Which of the following individual taxpayers cannot avail of the allowed deductions for
health and hospitalization insurance premiums?
A. Non-Resident citizen
B. Resident alien
C. Non-resident alien engaged in business in the Phil.
D. Non-resident alien not engaged in business in the Phil.
24. Taxable on income from all sources within and without the Phil.
A. Resident citizen B. Non-resident citizen C. Resident alien D. Non-
resident alien
