Solution manual transfer and business taxes by valencia CHAPTER 14 DOCUMENTARY STAMP TAX

BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS)
SUGGESTED ANSWERS

72

Chapter 14: DOCUMENTARY STAMP TAXES

CHAPTER 14

DOCUMENTARY STAMP TAXES
Problem 14 – 1
1. True
2. True
3. False – the transaction.
4. False – to be taxed against the party who is not exempt.
5. True
6. False – 10 days from the close of the month
7. True
8. True
9. True
10. True

Problem 14 – 2

B

Problem 14 – 3

A

Problem 14 – 4

B

Problem 14 – 5

C

Problem 14 – 6

D

Documentary stamp tax to be paid (P1,000/P200) x P10 x P2
Documentary stamp tax to be paid ($5,000 x P40/P200) x P0.30
DST on first P5,000
DST on excess of the first P5,000 = (P395,000/P5,000) x P10
Total documentary stamp tax

Documentary stamp tax (P800,000/P1,000) x P15
DST on first P2,000
DST on excess of the first P2,000 = (P142,000/P1,000) x P1
Total
Multiply by
Total documentary stamp tax

Problem 14 – 7

Face value of the bonds
Divide by
Multiply by documentary stamp tax
Documentary stamp tax

Problem 14 – 8

Par value of the stock (P100 x 1,000 shares)
Divide by
Multiply by documentary stamp tax
Documentary stamp tax

Problem 14 – 9

Par value (P100 x 100 shares)

P 100
P 300
P 20
790
P810
P12,000
P 3
142
P145
2
P290
P50,000
200
250
P 1.50
P
375
P100,000

200
500
P
2.00
P 1,000
P10,000


BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS)
SUGGESTED ANSWERS

73

Chapter 14: DOCUMENTARY STAMP TAXES

Divide by value
Multiply by documentary stamp tax
Documentary stamp tax

Problem 14 – 10

Face value of document
Divide by
Multiply by documentary stamp tax rate
Documentary stamp tax

Problem 14 – 11

Face value of document (P50 x $5,000)
Divide by

Multiply by documentary stamp tax rate
Documentary stamp tax

Problem 14 – 12
Insurance policy
Divide by

Multiply by documentary stamp tax rate
Documentary stamp tax

Problem 14 – 13

P
P

200
50
1.50
75

P100,000
200
500
P
0.30
P
150
P250,000
200
1,250

P
0.30
P
375
P1,000,000
200
5,000
P
0.50
P
2,500

Annual insurance premium
Divide by

P

Multiply by documentary stamp tax rate
Documentary stamp tax

P
P

5,000
4
1,250
0.50
625

Problem 14 – 14

The documentary stamp tax on the affidavit of loss is P15.00.
Problem 14 – 15
The documentary stamp tax would be P10.00.

Problem 14 – 16

Sales price
Less: Unpaid mortgage balance
Balance
Less: Amount not subject to DST
Balance
Divide by
Multiply by
Documentary stamp tax
Add: DST for the first P1,000
Total documentary stamp tax

P1,000,000
200,000
P 800,000
1,000
P 799,000
P
1,000
799
P
15
P
11,985
15

P
12,000


BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS)
SUGGESTED ANSWERS

74

Chapter 14: DOCUMENTARY STAMP TAXES

Problem 14 – 17

Documentary stamp (P1,000,000/ P1,000) x 15
Surcharge (P15,000 x 25%)
Interest (from June 25 to July 25) (P15,000 x 20%)
Total payable

P15,000
3,750
250
P19,000

Problem 14 – 18
a. P – 0 –
b. P – 0 –
See page 503 of the textbook. Deeds of property donated to the government are exempt from
documentary stamp tax.