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    Session 2: Income Tax Instructions: Read Each Question Carefully. in Your Answers, Follow The Sequence and The Numbering

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    Kimberly Ramos
    This document contains instructions for a session on income tax law. It provides 5 questions that examine topics such as distinguishing income from capital, capital gains tax liability from property foreclosure, tax treatment of insurance policy proceeds and premium payments as employee compensation, taxation of fringe benefits, and capital gains tax exemption conditions for primary residence sales. Responses to the questions are to demonstrate analysis of facts, application of relevant laws and precedents, and logical conclusions supported by legal sources.

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    Session 2: Income Tax Instructions: Read Each Question Carefully. in Your Answers, Follow The Sequence and The Numbering

    Uploaded by

    Kimberly Ramos
    93 views2 pages
    This document contains instructions for a session on income tax law. It provides 5 questions that examine topics such as distinguishing income from capital, capital gains tax liability from property foreclosure, tax treatment of insurance policy proceeds and premium payments as employee compensation, taxation of fringe benefits, and capital gains tax exemption conditions for primary residence sales. Responses to the questions are to demonstrate analysis of facts, application of relevant laws and precedents, and logical conclusions supported by legal sources.

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    Quiz-Income-Tax.docx

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    This document contains instructions for a session on income tax law. It provides 5 questions that examine topics such as distinguishing income from capital, capital gains tax liability from property foreclosure, tax treatment of insurance policy proceeds and premium payments as employee compensation, taxation of fringe benefits, and capital gains tax exemption conditions for primary residence sales. Responses to the questions are to demonstrate analysis of facts, application of relevant laws and precedents, and logical conclusions supported by legal sources.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    93 views2 pages

    Session 2: Income Tax Instructions: Read Each Question Carefully. in Your Answers, Follow The Sequence and The Numbering

    Uploaded by

    Kimberly Ramos
    This document contains instructions for a session on income tax law. It provides 5 questions that examine topics such as distinguishing income from capital, capital gains tax liability from property foreclosure, tax treatment of insurance policy proceeds and premium payments as employee compensation, taxation of fringe benefits, and capital gains tax exemption conditions for primary residence sales. Responses to the questions are to demonstrate analysis of facts, application of relevant laws and precedents, and logical conclusions supported by legal sources.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Session 2: Income Tax

    Instructions: Read each question carefully. In your answers, follow the sequence and the numbering
    system used in the Questionnaire. Your answers should demonstrate your ability to analyze the facts,
    apply the pertinent laws and jurisprudence, and arrive at sound and logical conclusions. Always support
    your answers with the pertinent laws, rules, and/or jurisprudence. A mere "yes" or "no" answer without
    any corresponding explanation or discussion may not be given full credit. Answer as if you are answering
    the bar exam.

    I. Distinguish income from capital.

    ANS:

    II. Hopeful Corporation obtained a loan from Generous Bank and executed a mortgage on its real
    property to secure the loan. When Hopeful Corporation failed to pay the loan, Generous Bank
    extrajudicially foreclosed the mortgage on the property and acquired the same as the highest bidder. A
    month after the foreclosure, Hopeful Corporation exercised its right of redemption and was able to
    redeem the property. Is Generous Bank liable to pay capital gains tax as a result of the foreclosure sale?
    Explain. 

    ANS:

    III. Noel Santos is a very bright computer science graduate. He was hired by Hewlett Packard. To entice
    him to accept the offer for employment, he was offered the arrangement that part of is compensation
    would be an insurance policy with a face value of P20 Million. The parents of Noel are made the
    beneficiaries of the insurance policy.

    a. Will the proceeds of the insurance form part of the income of the parents of Noel and be subject
    to income tax? Reason briefly.

    ANS:

    b. Can the company deduct from its gross income the amount of the premium? Briefly.

    ANS:

    IV. Explain how fringe benefits are taxed.

    ANS:

    V. Mr. H decided to sell the house and lot wherein he and his family have lived for the past 10 years,
    hoping to buy and move to a new house and lot closer to his children's school. Concerned about the
    capital gains tax that will be due on the sale of their house, Mr. H approaches you as a friend for advice
    if it is possible for the sale of their house to be exempted from capital gains tax and the conditions they
    must comply with to avail themselves of said exemption. How will you respond?

    ANS:

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