Transfer and business taxes by ampongan 6th sol man 12

EXERCISES 12 - 1
1.

To Dimapigil

P
3,000,000
600,00
0
3,600,00
0

Dimasupil
Gross gift
Less: Deductions
Mortgage assumed
Assumed debt

P 500,000
50,000

Net gift

550,00
0
3,050,00
0

2.

All of the donations given by Mr. Maapil are taxable. Moreover, not anyone of these

donations is allowed to claim exemptions such as the P10,000 dowries because all
of the donations do not comply with the requisites. The donations given to persons
who are strangers to the donor are taxable at 30% of net gift, while the donees who
are not strangers to the donor are taxable based on the schedule of tax rates
provided under the code.

3.

The donation given to the Municipality of Arbor is not subject to donor's tax
because it is a donation of property to the government for exclusively public
purposes. The fact that the municipality will collect P20.00 from every bus that will
avail of the facilities of the bus terminal does not defeat its being for public
purpose.
The donation given to a home for the aged is exempt also because it is a
donation to a charitable institution. Moreover, it is clear that only 30% and not
more than this rate is to be used for administration purposes.
The donation given to the Development Academy of the Philippines is exempt
under special law.
Therefore, not anyone of the above donations is subject to tax.

4.

a. Not exempt. The entire amount is taxable.
b.

The entire value (P50,000) of the property donated is exempt because the
donation is given to a political subdivision of the government for exclusively
public purpose.

c.

Taxable because more than 30% of the donation is to be used for
administration purposes.

d.

Exempt up to P10,000. To be able to claim exemption of P10,000 the donee
must be either legitimate, recognized natural or legally adopted child. A
recognized natural child is an illegitimate child.

e.

The donation is exempt up to P10,000 because it is given on account of
marriage and within the one year period after the celebration of marriage.

EXERCISES 12–2
1. The entire amount of P20,000 represents the gross gift.
2. P30,000, the value of the diamond ring given to the donee.
3. If the joint account is in the name of Angelo and/or Loren, any of them can
withdraw without the consent of the other. However, the amount of donation

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shall be based on the amount withdrawn because that is the time where the
dominion and control of the object is transferred to the donee.
4. The payment made to UST Hospital is an indirect gift to Sabaya Cuartana.
Therefore, the amount of P120,000 represents the gross gift.
5. If there was splitting of gift between the spouses, Wilma and Henry shall be
donors and shall have a gross gift of P150,000 each.

6. Ernest shall have a gross gift of P50,000 because his contribution was not
reported in the Statement of Elections and Expenditures which was submitted to
the COMELEC.
7. The P3,000 shall constitute as the gross gift.
8. There is sale of the summer home for insufficient consideration. The value of
the gross gift would be P250,000 (P850,000 – 600,000).
9. Jerome has relinquished dominion and control over the property because the
trust is irrevocable. The amount of gross gift is the fair value of the property
placed in trust.
10. The amount of gross gift is P200,000. However, it shall be subject to a
deduction of whatever amount of gift tax will be paid.

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