Testbank-Donors-Tax _ BA 2 | latest (Update | Guaranteed Correct Answers

DONORS TAX: THEORY 1. For the donation to be considered valid, acceptance of the donation must be made. a. during the lifetime of the donor only. b. during the lifetime of the donee only c. during the lifetime of the donor and the donee d. none of the choices 2. First statement: Donors tax shall be levied, assessed collected and paid upon the transfer of property by any person , resident or non-resident as a gift. Second statement: For the purpose of donor’s tax, a stranger is a person who is not a relative by consanguinity in the collateral line within the fifth degree of relationship. a. True, True b. False, False c. True, False d. False True 3. One of the following donees will not entitle the donor-parent to a P10,000 dowry exemption. a. Legitimate Child b. Recognize Natural Child c. Adopted Child d. Stepchild 4. Which of the following statement is incorrect? a. A separate return shall be filed by each donor for each gift or donation made on different dates during the year reflecting therein any previous net gift made in the same calendar year. b. Only one return shall be filed for several gift or donations by a donor to the different donees on the same date. c. When a donors tax return was filed and it was found out by the BIR to have errors which gave rise to a deficiency donors tax, the donor cannot be required to pay the deficiency. d. The government is not legally bound by the agreement between the donor and the donee that the later shall pay the donors tax instead of the former. 5. First statement: In all cases, void donations are not subject to donors tax. Second statement: Every donation between the spouses during the marriage shall be void. a. both statements are true b. both statements are false c. First statement is true while second statement is false d. First statement is false while the second statement is true 6. Mr. John Samuelson, resident alien, donated a piece of jewelry to his son who got married on January 15, 2009. The piece of jewelry was mailed to his son on January 10, 2009 and was accepted on January 20, 2009. When is the last day to file the donors tax return? a. February 9, 2009 b. February 14, 2009 c. February 19, 2009 d. March 20, 2009 7. When a property is donated in contemplation of death the basis of the tax shall be: a. Fair market value at the time of death b. Fair market value in the hands of the donor before the time of donation c. Fair market value at the time of death of the donor d. Cost when the property was acquired 8. Which of the following is a stranger for donor’s tax purposed? a. A child born out of wedlock of parents who are legally impeded to marry each other at the time the child is being conceived. b. The son of the donor’s first cousin c. The donor’s grandmother d. The donor’s spous 9. When the donee is a stranger the tax payable is: a. 30% of the gross gifts b. 30% of the net gifts c. based on the graduated tax rates d. based on the graduated tax rates or 30% of gross gifts whichever is higher 10. First statement: A donation on which the donor’s tax is net paid is a valid donation Second statement: Title to a tax –exempt donation of a real property cannot be transferred to the donee in the Register of Deeds unless the donor’s tax on the donation had been paid a. True, True b. False, False c. True, False d. False, True 11. The donation of personal (movable) property may be made: I. Orally of the value is P5,000 or less requiring simultaneous delivery. II. In Writing if the value is more than P 5,000 a. Both I and II are correct b. Both I and II are incorrect c. Only I is correct d. Only II is correct 12. The donation of movable property may be made: a. Orally b. Writing c. Either A or B d. Neither A or B 13. Using the preceding number, the donation and acceptance should be in writing if the value of the property donated is: a. Less than P 5,000 b. P5,000 or less c. P5,000 or more d. More than 5000 14. The donation of an immovable property shall be made a. In writing b. In public instruments c. Either A or B d. Orally 15. Using the preceding number, acceptance by the donee may be made: a. In same deed of donation b. In a separate document c. Either A or B d. Neither A or B 16. A. For the purpose of donor’s tax, second degree cousins are strangers to each other. B. Encumbrance of the property donated, if assumed by the donor is deductible for the donors tax purposes. a. True, True b. True, False c. False, True d. False, False 17. A. As a rule, donation between husband and wife during marriage is void B. Donation can be made to conceived or unborn children a. True, True b. True, False c. False, True d. False, False 18. A donation which takes upon the death of the donor a. Donation mortis causa b. Partakes of the nature of a testamentary disposition c. Shall be governed by the law on succession d. A, B and C 19. A donation which is intended by the donor to take effect during his lifetime a. Shall be subject to donor’s tax using the tax table for donation b. Shall be in writing if the value exceeds P 5,000 c. Donation inter vivos d. A, B and C 20. A. gift is perfected from the moment the donor effects the delivery either actual or constructively of the property donated. B. Donors tax is a property tax imposed on the property transferred by way of gift inter-vivos a. True, True b. True, False c. False, True d. False, False CPA REVIEW CENTER TAX00 – Donor’s Tax Theories 1. Donations that do not conform to legal formalities are a. Taxable under Donor’s tax notwithstanding absence for formalities b. Exempt from Donor’s tax c. Subject to Estate tax d. Subject to income tax 2. Acceptance is essential for a valid donation to be subject to donor’s tax, except transfers a. in trust by the donor in favour of a beneficiary b. of business interest by the donor in favour of an stranger c. for less than adequate consideration d. by Filipino residents to non-resident aliens 3. The donation of an immovable property shall be made a. In writing c. Either A or B b. In a public instrument d. Orally 4. Using the preceding number, acceptance by the donee may be made a. In the same deed of donation c. Either A or B b. In a separate document d. Neither A nor B 5. The donation of a movable property may be made a. Orally b. In writing c. Either A or B d. Neither A nor B 6. Using the preceding number, the donation and acceptance should be in writing if the value of the property donated is a. Less than P5,000 b. P5,000 or less c. P5,000 or more d. More than P5,000 7. A donation which takes effect upon the death of the donor a. Donation mortis causa b. Partakes of the nature of a testamentary disposition c. Shall be governed by the law on succession d. A, B and C 8. A donation which is intended by the donor to take effect during his lifetime a. Shall be subject to donor’s tax using the tax table for donation b. Shall be in writing if the value exceeds P5,000 c. Donation inter-vivos d. A, B and C 9. Which is incorrect concerning donation? a. Real property is transferred by donation only if made under a public instrument b. Donation of intangible personal property should be in writing c. Personal property amounting to more than P5,000 should be in writing d. No one can be forced to accept the generosity of another 10. Which is correct regarding transfer inter-vivos involving personal properties for less than an adequate and full consideration? a. The whole value of the property will be included in gross gift b. The difference in fair value and consideration is a gift subject to donor’s tax c. The whole value of the property will be included in gross estate d. The difference in fair value and consideration is part of gross estate 11. Contracts without the essential element of consideration is considered as a. Void c. Unenforceable b. Donation d. Rescissible 12. All elements of donor’s tax must always concur for the donation to be valid. Except a. Acceptance c. Capacity b. Delivery d. Intent 13. Donor’s tax rate is at a. 6% c. 2 – 15% b. 30% d. 5% - 20% 14. Donor’s tax applies to gifts a. In excess of P250,000 c. In excess of P100,000 b. In excess of P200,000 d. All gifts 15. Dowries valued P10,000 made on account of marriage by parents to their children is subject to a. Donor’s tax c. Estate tax b. Exemption d. Income tax 16. Donor’s tax should be paid by the? a. Donor c. Administrator b. Donee d. Executor 17. This are considered void donations, except a. Between husband and wife b. Made to public officer or his/her family on account of his/her office c. Any physician, health officer, priest who took care or extended spiritual care to the donor during his last illness d. Donation to an unborn child 18. Jerwin, a surviving spouse, renounced his share in the conjugal partnership a. Renunciation is subject to donor’s tax b. Renunciation is subject to estate tax c. Renunciation is exempt from donor’s tax d. Renunciation is void 19. Sonly renounced his inheritance in the estate a. Renunciation is subject to donor’s tax b. Renunciation is subject to estate tax c. Renunciation is exempt from donor’s tax d. Renunciation is void 20. Statement 1: Corporations are allowed to donate inter-vivos Statement 2: Corporations are allowed to donate mortis-causa a. Both are correct c. Only 1 is correct b. Both are incorrect d. Only 2 is correct 21. The following transfers are taxable under donor’s tax, except? a. Transfers made by the donor to relieve himself of the burden of management of his properties b. Transfers made by the donor to settle family disputes c. Transfers made by a parent to see his children enjoy his properties while he still lives d. Transfers under power of general appointment 22. Which is incorrect? a. Donations of non-resident aliens involving properties located abroad to residents of the Philippines is exempt from donor’s tax b. Renunciation of inheritance by an heir to another is not subject to donor’s tax c. Donation by a non-resident citizen to a non-resident alien is exempt from donor’s tax d. Gifts are reckoned on an annual basis; the tax is determined for the whole gift throughout the year; hence, a computation is made every time a donation is made 23. Which of the following donation may be exempt? a. Donation of a resident alien of its properties located abroad to a non-resident alien b. Donation of a non-resident alien of real properties located in the Philippines to a resident alien c. Donation of non-resident alien of intangible properties located in the Philippines to a non-resident alien d. Donation of a intangible properties located in the Philippines by resident aliens 24. Which of the following is not included in gross gift? a. Transfers to non-profit non-stock charitable institution b. The portion of the fair value of a property transferred adequately paid for in transfer for less than an adequate consideration c. The portion of the donation representing dowry exemption d. Donation to the government for public use 25. Donation to the following entities is exempt from Donor’s taxation, except a. Accredited national professional organization of certified public accountant (PICPA) b. Integrated Bar of the Philippines c. International Rice Research Institute d. Ramon Magsaysay Award Foundation 26. I. Dowries or gifts made on account of family celebration, on or before its celebration, or within one year thereafter, by parents to each of their legitimate, recognized natural or adopted children, to the extent of the first P10,000 shall be exempt from the donor’s tax II. Donations in favour of an educational and or charitable, religious, cultural or social welfare corporation, institution, accredited non – government organization, trust or philanthropic organization or research institution or organization provided that no amount of said gifts shall be used by the donee for administration purposes shall be exempt from donor’s tax a. True, true b. True, False c. False, True d. False, False 27. A. If the value of the movable property donated is P5,000 or more the donation and the acceptance shall be made in writing, otherwise the donation shall be void B. Regardless of the value of the immovable property donated, the donation and the acceptance shall be made in writing, otherwise the donation shall be void. a. True, True b. True, False c. False, True d. False, False 28. I. The gift is perfected from the moment the donor effects the delivery either actually or constructively of the property donated II. Donor’s tax is a property tax imposed on the property transferred by the way of gift inter-vivos a. True, True b. True, False c. False, True d. False, False 29. I. Where property is transferred during lifetime for less than adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall for the purpose of the donor’s tax, be deemed a gift II. Gifts of conjugal property made by both spouses shall be considered as having been made one – half by the husband and the other half by the wife and is taxable ½ to each donor spouse a. True, True b. True, False c. False, True d. False, False 30. I. For purpose of the donor’s tax, second degree cousins are strangers to each other. II. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s tax purposes. a. True, True b. True, False c. False, True d. False, False 31. I. As a rule, donation between husband and wife during the marriage is void. II. Donation can be made to conceived or unborn children. a. True, True b. True, False c. False, True d. False, False 32. 1st Statement: When the donee is a stranger, the tax payable by the donor shall be 30% of the net gifts. 2nd Statement: When the donee is a relative the tax payable by the donor shall be based on the scheduler rates of donor’s tax provided in Section 99 of the Tax Code. a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 33. For purposes of donor’s tax, a “stranger: is a person who is not a: I – brother, sister (whether by whole of half blood), spouse, ancestor, and lineal descendant; or II – relative by consanguinity in the collateral line within the fifth degree of relationship a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 34. 1st Statement – A legally adopted child is entitled to all the rights and obligations provided by law to legitimate children, and therefore, donation to him shall not be considered as donation made to stranger 2nd Statement – Donation made between business organization and those made between an individual and a business organization shall be considered as donation made to a stranger a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 35. 1st Statement – Any contributions in cash or in kind to any candidate, political party or coalition of parties for campaign purposes, shall be governed by the Election Code, as amended 2nd Statement – Any provision of law to the contrary notwithstanding, any contribution in cash or in kind to any candidate or political party or coalition of parties for campaign purposes duly reported to the COMELEC shall not be subject to the payment of any gift tax a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 36. The donor’s tax is a a. Property tax on the property transferred b. Personal tax on the person who transferred the property c. Tax imposed on the transfer of property by way of gift inter vivos d. Tax imposed on the transfer of property by way of gift mortis causa 37. 1st Statement – The donor’s tax shall not apply unless and until there is a completed gift. 2nd Statement – The law in force at the time of the perfection/completion of the donation shall govern the imposition of the donor’s tax a. Both statements are correct b. Both statements are incorrect c. Only the first statement is correct d. Only the second statement is correct 38. When is the donation perfected? a. The moment the donor knows of the acceptance by the donee b. The moment the donated property is delivered, either actually or constructively, to the donee c. Upon payment of the donor’s tax https://wdw. w.Uu/ftilieo/8n40o40f10th2/eTedstebaendk-Doofndoros-nTaaxtpidofn/ 39. When is the donation completed? a. The moment the donor knows of the acceptance by the donee b. The moment the donated property is delivered, either actually or constructively, to the donee c. Upon payment of the donor’s tax d. Upon execution of the deed of donation 40. A gift that is incomplete because of reserved powers, becomes complete when either: I – the donor renounces the power; or II – the right to exercise the reserved power ceases because of the happening of some event or contingency or the fulfillment of some condition, other than because of the donor’s death a. True in both I and II c. True in I only b. Not true in both I and II d. True in II only 41. Which of the following renunciations shall be subject to donor’s tax? I – Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute community after the dissolution of the marriage in favor of the heirs of the deceased spouse or any other person/s II – General renunciation by an heir, including the surviving spouse, of his/her share in the hereditary estate left by the decedent; III – Renunciation by an heir, including the surviving spouse of his/her share in the hereditary estate left by the decedent categorically in favor of identified heir/s to the exclusion or disadvantage of the other co – heirs; a. I, II and III c. I and III only b. I and II only d. I only 42. 1st Statement – Where property, other than a real property that has been subjected to final capital gains tax, is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the fair market value of the property at the time of the execution of the Contract to Sell or execution of the Deed of Sale which is not preceded by a Contract to Sell exceeded the value of the agreed or actual consideration or selling price shall be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year 2nd – The law in force at the time of the completion of the donation shall govern the imposition of donor’s tax a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 43. The following donations were made by Don Lopot during the taxable year: Donation to TESDA- priority project Revocable donation of car to his son Inadequate consideration of real property sold to his friend Donation to his wife Donation to his unborn grandchild P900,000 800,000 700,000 300,000 200,000 How much is the amount of donation subject to donor’s tax? a. P2,000,000 b. P1,800,000 c. P900,000 d. P200,000 44. How much is the amount of gift subject to donor’s tax if X, a Filpino citizen, made a general renunciation of his P2,000,000 inheritance in favor of his siblings and the inheritance was taken from the conjugal property of the parents? a. P -0- b. P500,000 c. P1,000,000 d. P2,000,000 45. Ma, Ru, Nong and Daw are brothers and sisters. Their parents died leaving a total gross estate of P11,000,000. Ma, being very rich, renounced his inheritance in favor of Daw. How is the donor’s tax to be paid by Ma? https://aw.wPw.-