📘 Discussion Questions (Questions

Only)
1.​ What are ordinary assets and capital assets? Discuss.​

2.​ Enumerate the two types of capital assets subject to capital gains tax.​

3.​ What are the transactions considered as "other disposition" of domestic stock?
What transactions are not considered as "other dispositions"?​

4.​ Discuss the rules on tax basis of stocks acquired by purchase, inheritance,
donation, for an inadequate consideration, and under a tax-free exchange.​

5.​ Enumerate the methods in costing stocks in order of priority.​

6.​ Discuss the compliance requirements of the two-tiered capital gains tax.​

7.​ Explain the concept of a wash sale.​

8.​ Enumerate and discuss the tax-free exchanges.​

9.​ What are the criteria of alternative taxation to the 6% capital gains tax?​

10.​Enumerate the exemption requirements to the 6% capital gains tax.​

11.​Discuss the nature of the 6% capital gains tax.​

12.​Compare the taxpayers covered by the 15% capital gains tax and the 6% capital
gains tax.​

📘 True or False 1 (Questions Only)

1.​ Capital assets will not become ordinary assets when used in business.​

2.​ A vacant and unused lot is an ordinary asset to a real estate dealer.​
3.​ For taxpayers not engaged in business, assets shall cease to be ordinary assets
when they are discontinued from active use for more than two years.​

4.​ Real and other properties acquired are ordinary assets to banks even if they are
not engaged in the realty business.​

5.​ An ordinary asset automatically becomes a capital asset when it is withdrawn

from active use.​

6.​ The sale of real property capital assets will never be subject to regular income
tax.​

7.​ Donated assets become ordinary assets even if the donee does not employ the
same in business.​

8.​ An ordinary asset continues to be an ordinary asset even if idled for more than
two years if the taxpayer is engaged in realty business.​

9.​ The real properties used by exempt corporations in their exempt operations are
capital assets.​

10.​Dealers in realties are subject to the regular tax on their sale of real properties.​

11.​Capital gains from assets other than domestic stocks and real properties are
subject to regular income tax.​

12.​Dealers in securities are not subject to the stock transaction tax but are subject to
the regular income tax on gains realized upon the sale of stocks through the
Philippine Stock Exchange.​

13.​Unit of participations in golf, polo, and similar clubs are considered domestic
stocks.​

14.​The excess premium on the re-issuance of treasury stocks is subject to capital

gains tax.​

15.​The issuance of shares of stock for property is subject to capital gains tax.​

16.​The sale of foreign stocks directly to a buyer is subject to capital gains tax.​

17.​The 15% final capital gains tax cannot apply unless and until there is a gain on
the sale, exchange, and other disposition of stocks directly to a buyer.​

18.​The stock transaction tax on the sale of stocks through the PSE shall apply if
there is a loss on the transaction.​
 19.​The 6% capital gains tax shall not apply unless there is a gain on the sale of real
property.​

20.​The sale of real properties located abroad is subject to the 6% capital gains tax.​

📘 True or False 2 (Questions Only)

1.​ Installment payment of capital gains tax is allowed if the ratio of downpayment
over the selling price of the sale does not exceed 25%.​

2.​ The annual capital gains tax return is simultaneously due with the annual regular
income tax return.​

3.​ The basis of properties received by way of inheritance is the basis in the hands of
the last owner who did not acquire the same by donation.​

4.​ When specific identification is impossible, the cost of the stocks sold is
determined by the weighted average method.​

5.​ The basis of the stocks received in tax-free exchanges is the basis of the shares
given.​

6.​ The transactional capital gains tax return is required to be filed within 30 days
from the date of sale.​

7.​ The gain on the sale of stocks for stocks pursuant to a plan of merger and
consolidation is exempt if it resulted in the transferor acquiring corporate control
over the absorbed corporation.​

8.​ The selling price is used to determine the propriety of using the installment
method but the contract price is used to determine the capital gains tax payable
in installment.​

9.​ The excess of mortgage over the basis assumed by the buyer constitutes an
indirect receipt which is part of the initial payment and the selling price.​

10.​Wash sales occur when there is a repurchase of identical securities within 30

days before and 30 days after the date of disposal of securities at a loss.​

11.​Control means more than 50% ownership in the voting power of a corporation.​
 12.​The sale of delisted stocks is subject to stock transaction tax and not to capital
gains tax.​

13.​Gain and loss in a share-for-share swap pursuant to a plan of merger or

consolidation shall be recognized up to the extent of the cash and other
properties received.​

14.​The sale by the National Housing Authority of commercial lots is subject to capital
gains tax.​

15.​If the assessor's fair value is lower than the selling price, then the fair value of the
property is the zonal value.​

16.​Title to a property shall not be registered by the Registry of Deeds unless the
Commissioner or his representative has certified that the tax on the transfer has
been paid.​

17.​Domestic corporations are exempt from capital gains tax on the sale, exchange,
and other disposition of real properties.​

18.​The sale of land pursuant to the Agrarian Reform Program is exempt from capital
gains tax.​

19.​Foreign corporations are required to pay capital gains tax on the sale of domestic
stocks and on the sale of real property capital assets.​

20.​The alternative taxation on an expropriation sale is not applicable to corporate

taxpayers.​

## *Multiple Choice – Theory: Part 1*

1. Which is subject to the 15% capital gains tax?

a. Sale of domestic stocks directly to a buyer within or outside the Philippines
b. Sale of domestic bonds directly to a buyer within the Philippines
c. Sale of domestic stocks through the Philippine Stock Exchange
d. All of the above

2. Which is an ordinary asset?

a. Personal car
b. Delivery truck
c. Real property held for sale
d. Leasehold improvements
3. Which is not an ordinary asset?
a. Personal laptop of the taxpayer
b. Machineries and equipment
c. Principal residence of the taxpayer
d. Wedding ring of the taxpayer

4. Which is a capital asset to a realty developer?

a. Construction equipment
b. Domestic stocks
c. Vacant lot held for future development
d. Head office building of the developer

5. Which is an ordinary asset?

a. Home appliances
b. Personal car
c. Personal cellphone
d. Office supplies

6. Which of the following assets, if not used in business, is subject to regular tax?
a. Real property
b. Domestic stock rights
c. Domestic stock option
d. Taxpayer's personal car

7. Which is a capital asset for a security dealer?

a. Domestic stocks
b. Domestic bonds
c. Stocks held as investment
d. Office equipment

8. Who is not subject to capital gains tax on the sale of domestic stocks directly to a
buyer?
a. Dealer of cars
b. Real property developer
c. Dealer of securities
d. Realty dealer

9. Which of the following, when sold, is not subject to capital gains tax?
a. Boarding house
b. Warehouse
c. House and lot
d. A and B

10. Which is not subject to the 6% capital gains tax?

a. Donation of property
b. Foreclosure of a mortgaged property
 c. Expropriation of one's property in favor of the government
d. Sale of property for an insufficient consideration

11. Statement 1: Capital gains may arise from sale, exchange, and other disposition of
movable properties used in business.
Statement 2: Ordinary gains may arise from sale, exchange, and other disposition of
real properties not used in business.
Which is true?
a. Statement 1 is correct.
b. Statement 2 is correct.
c. Both statements are false.
d. Both statements are correct.

12. Statement 1: The gain on sale of domestic stocks directly to a buyer is presumed.
Statement 2: The gain on sale of real properties is presumed.
Which is correct?
a. Both statements are true.
b. Both statements are false.
c. Only statement 1 is true.
d. Only statement 2 is true.

13. Which of the following properties when sold may be subject to capital gains tax?
a. Domestic stock
b. Foreign stocks
c. Patent
d. Office buildings

14. Statement 1: Only depreciable assets of business qualify as ordinary assets.

Statement 2: Land used in business is a capital asset since it is not subject to
depreciation.
Which is correct?
a. Statement 1 is false.
b. Statement 2 is false.
c. Both statements are false.
d. A, B and C

15. Statement 1: Ordinary gains may arise from sale, exchange, and other dispositions
of real properties used in business.
Statement 2: Capital gain may arise from sale, exchange, and other dispositions of
real properties not used in business.
Which is false?
a. Statement 1 is correct.
b. Statement 2 is correct.
c. Both statements are false.
d. Both statements are correct.
---

## *Multiple Choice – Theory: Part 2*

1. Which of the following sales of domestic stocks is subject to capital gains tax?
a. Sale of domestic stocks through the PSE
b. Issue of domestic stocks to subscribers
c. Sale of domestic stocks directly to a buyer
d. Exchange of stocks for stocks in a corporate merger

2. Which of the following properties, when sold, may be covered by regular income tax?
a. Share options
b. Preferred stocks
c. Share warrants
d. Promissory notes

3. Which of the following assets may be subject to capital gains tax upon disposal?
a. Parking lot
b. Dormitory
c. Farm lot
d. Office supplies

4. The sale of an office building will be subject to

a. 60% of 1% percentage tax
b. 6% capital gains tax
c. 15% capital gains tax
d. Regular tax

5. The term "other disposition" covers

a. Foreclosure sales
b. Auction sale
c. Expropriation by the government
d. Any of these

6. The sale of listed shares will never be subjected to

a. 6% capital gains tax
b. 60% of 1% percentage tax
c. 15% capital gains tax
d. Any of these

7. The sale of non-listed shares may be subjected to

a. 6% capital gains tax only
b. 60% of 1% percentage tax only
c. 15% capital gains tax only
d. Any of these
8. Which of the following when sold may be exempted from the 6% capital gains tax?
a. Unused land to the government
b. Residential lot
c. Developed residential properties for sale
d. Principal residence

9. Statement 1: The sale or exchange must result to an actual gain before the 15%
capital gains tax is imposed.
Statement 2: The sale or exchange must result to an actual gain before the 6% capital
gains tax is imposed.
a. Both statements are correct
b. Both statements are incorrect
c. Only statement 1 is correct
d. Only statement 2 is correct

10. When the annualized capital gains tax exceeds the transactional capital gains tax,
the excess is a
a. Tax credit
b. Tax payable
c. Tax refundable
d. A or B

11. 1st statement: Properties acquired by real estate dealers are ordinary assets.
2nd statement: Properties of real estate dealers continue to be classified as ordinary
assets even if they change the nature of their business.
a. First statement is correct
b. Second statement is correct
c. Neither statement is correct
d. Both statements are correct

12. 1st statement: When realty businesses discontinue use of assets for more than two
years, the same shall be reclassified as capital assets.
2nd statement: When realty businesses discontinue use of assets for more than two
years, the same shall be reclassified as capital assets.
a. First statement is correct
b. Second statement is correct
c. Neither statement is correct
d. Both statements are correct

13. Which is an incorrect statement?

a. The capital gains tax on the disposition of capital stock presumes the existence of
gain on the sales transaction.
b. The buyer of real property capital asset shall withhold the tax at source and remit
the same to the government.
c. Capital gains tax is identified under the NIRC as a form of final tax.
 d. The capital gains tax on the disposition of real property presumes the existence of
gain on the sales transaction.

14. Which of these shall pay the two-tiered capital gains tax?
a. A real property developer
b. A dealer in stocks
c. A merchandiser or trader of goods
d. A or B

15. The sale of real properties which would otherwise be subject to the 6% capital gains
tax may nevertheless be subject to regular income tax if all of the following conditions
are met, except one. Which is the exception?
a. The seller must be an individual taxpayer
b. The sale involves the principal residence of the taxpayer
c. The buyer is the government
d. The taxpayer opted to be subjected to regular tax

16. Which of these pay the 6% capital gains tax?

a. Security dealer
b. Real property dealer
c. Real property developer
d. None of these

17. The sale of a principal residence is exempt from the capital gains tax if all of the
following conditions are met, except:
a. The proceeds is fully utilized in acquiring a new principal residence.
b. The reacquisition must be by purchase.
c. The reacquisition must have been made within 18 months
d. (Option text missing, likely continuation needed)

---

## *Multiple Choice – Theory: Part 3*

1. The installment payment of capital gains tax is applicable to the

a. 15% capital gains tax only
b. 6% capital gains tax only
c. Both A and B
d. Neither A nor B

2. The transactional 15% capital gains tax is to be paid

a. Within 30 days from the date of sale or exchange
b. Within 30 days from the end of month of sale
c. On the 15th day of the fourth month following the close of the quarter when the sale
was made
 d. On the 15th day of the fourth month following the taxpayer's year-end

3. The annual 15% capital gains tax return is due

a. Within 30 days from the end of the month of sale
b. Within 30 days from the date of sale or exchange
c. On or before the 15th day of the fourth month following the taxpayer's year-end
d. On or before the 15th day of the fourth month following the close of quarter when
the sale was made

4. Capital gains tax that is not payable on installment basis is due

a. Within 30 days from the date of sale or exchange
b. Within 30 days from the end of month of sale
c. On or before the 15th day of the fourth month following the close of the quarter
when the sale was made
d. On or before the 15th day of the fourth month following the taxpayer's year-end

5. Installment payments of the 6% capital gains tax is due

a. Within 10 days from the date of each installment payment
b. Within 30 days from the date of each installment payment
c. Within 15 days from the date of each installment payment
d. Within 20 days from the date of each installment payment

6. The installment payment of capital gains tax is applicable to

a. Individual taxpayers only
b. Corporate taxpayers only
c. Dealers in properties only
d. A or B

7. Which of these capital gains is subject to capital gains tax?

a. Gain on the sale of stock rights
b. Gain on sale of interest in a professional partnership
c. Gain on the sale of derivative financial instruments linked to commodity prices
d. Gain on sale of bonds

8. Paulo indicated in his return his intent to avail of the exemption from the 6% capital
gains tax. Under what condition will he be exempted?
a. When the proceeds of the sale exceeds the cost basis of the property sold
b. When the proceeds of the sale exceeds the acquisition price of the new residence
c. When the cost basis of the property sold exceeds its selling price
d. When the acquisition price of the new property exceeds the proceeds of the old
property sold

9. Partial taxation under the 6% capital gains tax will result when
a. The proceeds from the sale of the old property exceeds both its cost and the
acquisition price of the new property
b. The proceeds of the sale exceeds its zonal value and Assessor's fair value
 c. The proceeds of the old property exceeds the acquisition price of the new property
regardless of the tax basis, zonal value, and Assessor's fair value of the old property
d. The zonal value is greater than the sales proceeds of the old property

10. The transactional capital gains tax on domestic stocks is

a. Not a final tax
b. Included in the income tax return
c. Creditable to the regular income tax
d. Creditable to the annual capital gains tax due

11. The 15% capital gains tax does not apply to

a. Resident citizen dealers of stocks
b. Non-resident citizen dealers of cars
c. Resident alien dealers of computer parts
d. Domestic corporations dealing in real properties

12. The documentary stamp tax on the sale of domestic stocks directly to a buyer is
based on
a. Selling price
b. Par value
c. Fair value
d. Cost

13. The documentary stamp tax on the sale of real property is based on
a. Selling price
b. Fair value
c. Cost
d. A or B, whichever is higher

14. The 6% capital gains tax does not apply to

a. Domestic corporations
b. Resident aliens
c. Non-resident citizens
d. Foreign corporations

15. Who shall file the capital gains tax return for the sale, exchange, and other
disposition of real property?
a. Seller
b. Buyer
c. Transfer agent
d. The registry of deeds​
​
## Multiple Choice – Problems: Part 1 (Questions Only)

1. Poe sold domestic shares directly to buyer. The following relates to the sale:
Fair market value of shares: ₱400,000
Selling price: ₱300,000
Cost: ₱150,000
Compute the capital gains tax.
a. ₱7,500
b. ₱9,925
c. ₱15,000
d. ₱22,500

2. Mr. Dondi sold domestic stocks directly to a buyer at a mark-up on cost of ₱200,000.
He paid ₱5,000 broker's commission and ₱8,000 documentary stamp tax on the sale.
Compute the capital gains tax.
 a. ₱28,050
b. ₱14,500
c. ₱14,200
d. ₱13,700

3. Mr. Abdul, a non-resident alien, sold domestic stocks directly to a buyer at a net gain
of ₱70,000. Compute the capital gains tax.
a. ₱10,500
b. ₱6,000
c. ₱4,000
d. ₱3,500

4. Mr. Panay Cabig, a non-resident citizen, sold domestic stock rights directly to a buyer
at a net gain of ₱320,000. Compute the capital gains tax.
a. ₱30,000
b. ₱25,000
c. ₱27,000
d. ₱48,000

5. Mr. Bigos sold shares of a resident foreign corporation directly to a buyer. The shares
were purchased for ₱100,000 and were sold at a net selling price of ₱210,000. Compute
the capital gains tax.
a. ₱15,000
b. ₱11,000
c. ₱5,500
d. ₱0

6. Bayawan Inc. exchanged its investments representing domestic shares for a piece of
land owned by Eagle, Inc.
Fair market value of shares: ₱400,000
Fair market value of land: ₱500,000
Par value of shares: ₱300,000
Cost of shares: ₱350,000
Compute the capital gains tax.
a. ₱22,163
b. ₱15,000
c. ₱11,000
d. ₱9,988

7. Digong Inc. exchanged its share investment from Bee Inc., as payment of its
₱350,000 long outstanding loan from the latter. Digong acquired the shares for
₱300,000. Ignoring documentary stamp tax, compute the capital gains tax on the
transaction.
a. ₱0
b. ₱7,500
c. ₱5,000
 d. ₱2,500

8. On January 5, 2023, Teresita, a stock dealer, disposed the following shares directly to
a buyer:
Stock rights: Selling price ₱200,000, Cost ₱170,000
Common stocks: Selling price ₱100,000, Cost ₱110,000
Ignoring documentary stamp tax, the capital gains tax payable on the sale is
a. ₱0
b. ₱1,000
c. ₱1,500
d. ₱3,000

9. Kidapawan, Inc., a domestic service company, had the following transactions on the
sale of another domestic corporation:

* Purchased 20,000 shares for ₱40,000

* Purchased 30,000 shares for ₱63,000
* Sold 40,000 shares for ₱92,000
Using FIFO, compute the capital gains tax on the sale.
a. ₱0
b. ₱480
c. ₱1,500
d. ₱4,650

10. Assuming moving average method, compute the capital gains tax on the sale in the
preceding problem.
a. ₱0
b. ₱400
c. ₱500
d. ₱1,440

11. Argao Company made the following stock transactions:

* 6/15/2023: Bought 10,000 shares at ₱30

* 9/30/2023: Sold 8,000 shares at ₱28
* 10/3/2023: Bought 15,000 shares at ₱25
* 12/7/2023: Sold 10,000 shares at ₱32
Using FIFO, compute the deductible loss on the 9/30 sale.
a. ₱20,000
b. ₱16,000
c. ₱12,800
d. ₱0

12. Compute the taxable gain on the 12/7 sale.

a. ₱64,118
b. ₱60,000
 c. ₱51,467
d. ₱44,000

13. Mr. Gary has the following transactions involving non-listed stocks:

* 5/8/2023: Sale gain ₱120,000

* 8/5/2023: Sale loss ₱10,000
* 9/8/2023: Sale gain ₱250,000
Compute the annual capital gains tax due for 2023.
a. ₱54,000
b. ₱29,000
c. ₱22,000
d. ₱3,000

14. Mr. Cabilao shows the following stock transactions:

* 2/8/2023: Bought 10,000 shares for ₱120,000

* 4/5/2023: Sold 10,000 shares for ₱100,000
* 5/1/2023: Bought 20,000 shares for ₱240,000
What is the tax basis of the shares acquired on May 1, 2023?
a. ₱300,000
b. ₱260,000
c. ₱240,000
d. ₱220,000

15. Mrs. San Marcelino, a resident citizen, purchased 100,000 shares of PhilHotdogs for
₱200,000. She disposed the shares for ₱250,000 through the PSE. Compute the capital
gains tax.
a. ₱0
b. ₱2,500
c. ₱7,500
d. ₱10,000

16. Mr. Candelaria disposed stocks for ₱400,000 and paid ₱2,000 in stock transaction
tax. Aggregate gain was ₱98,000 after that tax. What is the capital gains tax?
a. ₱0
b. ₱4,900
c. ₱9,800
d. ₱14,700

---

## Multiple Choice – Problems: Part 2 (Questions Only)

1. Bogo sold 1,500 shares of Bantayan Corp.:

 * Par value: ₱85
* Purchased at ₱90/share
* Sold at ₱120/share
What is the capital gains tax?
a. ₱2,625
b. ₱2,250
c. ₱6,607
d. ₱11,375

2. Shares of domestic corp:

* 2/8/2023: Bought 10,000 for ₱112,000

* 4/5/2023: Sold 10,000 for ₱100,000
* 5/1/2023: Bought 8,000 for ₱80,000
* 6/7/2023: Sold 5,000 for ₱60,000
Compute capital gain on 6/7.
a. ₱4,000
b. ₱5,000
c. ₱10,000
d. ₱12,000

3. Sold domestic stocks:

* Selling price: ₱500,000

* Cost: ₱200,000
* Downpayment: 10%
* 2023 installments: ₱50,000
Compute total CGT in 2023.
a. ₱45,000
b. ₱25,000
c. ₱9,000
d. ₱6,250

4. Pampanga, Inc. realized:

* Gain domestic stocks: ₱300,000

* Par value domestic stocks: ₱200,000
* Gain on partnership interest: ₱200,000
* Gain on foreign stocks: ₱150,000
Compute CGT.
a. ₱45,000
b. ₱44,775
c. ₱35,000
d. ₱25,000
5. Compute DST in the preceding problem.
a. ₱1,500
b. ₱1,125
c. ₱562.50
d. ₱750

6. Wash sale:

* Sold 20,000 shares at ₱40,000 loss

* Bought 15,000 shares at ₱12/share within 30 days
Deductible loss is:
a. ₱0
b. ₱13,333
c. ₱10,000
d. ₱20,000

7. Cost of 15,000 shares acquired?

a. ₱150,000
b. ₱180,000
c. ₱190,000
d. ₱210,000

8. Mr. Homonhon bought shares at 150% above par. Sold after 2 years at double fair
value. Paid ₱7,500 DST and ₱10,000 commissions. Compute selling price.
a. ₱3,000,000
b. ₱2,500,000
c. ₱1,500,000
d. ₱1,000,000

9. Compute capital gains tax.

a. ₱143,625
b. ₱152,750
c. ₱153,725
d. ₱222,375

10. On June 20, 2023, Mr. Limon filed CGT return for stocks sold on Feb. 20, 2023. Net
gain: ₱140,000. Compute total tax including penalties except compromise.
a. ₱26,880
b. ₱26,871
c. ₱11,721
d. ₱12,254

---

## Multiple Choice – Problems: Part 3 (Questions Only)

1. On Aug 15, 2023, Ms. Mones sold a residential house and lot (500 sqm) for
₱3,000,000.

* Acquired in 2006 at ₱2,000,000

* Assessor’s FMV: House ₱1,500,000, Lot ₱1,000,000
* Zonal value of lot: ₱5,000/sqm
What is the CGT?
a. ₱180,000
b. ₱120,000
c. ₱150,000
d. ₱240,000

2. A taxpayer purchased a building for future use. It remained unused for 3 years. Due to
low demand, it was sold. What is the asset classification?
a. Ordinary asset
b. Capital asset
c. Either A or B at BIR discretion
d. Either A or B based on buyer’s intent

3. Same data, but after use as sales outlet, it became vacant for over 2 years. What is
the classification?
a. Ordinary, regardless of taxpayer
b. Capital, regardless of taxpayer
c. Ordinary, if not in real estate
d. Capital, if not in real estate

4. Anderson disposes a vacant lot for ₱3,000,000; Assessor FMV ₱2,800,000; Zonal
₱3,200,000; Appraisal ₱3,500,000. What is the CGT?
a. ₱0
b. ₱180,000
c. ₱192,000
d. ₱210,000

5. Puerto Princesa Co. sold parking lot for ₱2,000,000.

* Zonal: ₱2,500,000
* Appraisal: ₱1,800,000
CGT is:
a. ₱0
b. ₱108,000
c. ₱120,000
d. ₱150,000
6. Mr. Antonio sold principal residence for ₱2,000,000, bought a new residence for
₱1,800,000. Original cost: ₱1,000,000; FMV: ₱2,500,000. Compute CGT to deposit in
escrow.
a. ₱0
b. ₱60,000
c. ₱120,000
d. ₱150,000

7. What is the tax basis of the new residence?

a. ₱1,800,000
b. ₱1,000,000
c. ₱900,000
d. ₱800,000

8. How much of the CGT will be released to the taxpayer?

a. ₱150,000
b. ₱135,000
c. ₱120,000
d. ₱15,000

9. Manny sold his principal residence for ₱11,000,000 (original price). FMV ₱13,000,000.
Proceeds not reinvested but new funds of ₱15,000,000 used to build residence. CGT is:
a. ₱0
b. ₱660,000
c. ₱750,000
d. ₱780,000

Numbers 10–12 based on: Mr. Manaloto sold residential land in Manila, FMV
₱12,000,000, sold for ₱10,000,000.

10. If entire ₱10,000,000 is used to buy new residence, final tax due is:
a. ₱720,000
b. ₱600,000
c. ₱120,000
d. ₱0

11. If only ₱7,000,000 was used, final tax due is:

a. ₱720,000
b. ₱216,000
c. ₱180,000
d. ₱0

12. Documentary stamp tax due on the sale is:

a. ₱179,895
b. ₱180,000
c. ₱149,985
 d. ₱150,000

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## Multiple Choice – Problems: Part 4 (Questions Only)

1. Mrs. Dotan sold a residential lot on June 1, 2021, for ₱2,000,000. Zonal value:
₱2,500,000; Assessor's value: ₱1,000,000. Paid CGT on July 1, 2022; compromise
penalty ₱20,000. Compute total tax due.
a. ₱150,000
b. ₱205,549
c. ₱217,500
d. ₱225,500

2. REO Basic Co. paid ₱9,000 DST on sale of real property capital asset. Compute CGT.
a. ₱9,000
b. ₱16,000
c. ₱36,000
d. ₱42,000

3. Mr. Datu sold residential land for ₱4,000,000. FMV: ₱3,500,000; Assessor:
₱2,000,000. Total income tax and DST due?
a. ₱0
b. ₱300,000
c. ₱400,000
d. ₱450,000

4. Mr. Quirino exchanged Carmen Corp. shares for Dingalan Corp. shares (60%
ownership):

* Basis: ₱3,000,000
* FMV given: ₱5,000,000
* FMV received: ₱4,500,000
Compute CGT.
a. ₱0
b. ₱45,000
c. ₱145,000
d. ₱225,000

5. What is the basis of the shares received by Quirino?

a. ₱0
b. ₱3,000,000
c. ₱4,500,000
d. ₱5,000,000
6. Mr. Rhad exchanged DEF shares for EFG shares in a merger:

* DEF cost: ₱1,000,000

* DEF fair value: ₱1,500,000
* Received EFG shares ₱1,300,000 + ₱200,000 cash
Compute CGT.
a. ₱0
b. ₱15,000
c. ₱30,000
d. ₱45,000

7. What is the basis of the shares received by Mr. Rhad?

a. ₱0
b. ₱1,000,000
c. ₱1,200,000
d. ₱1,300,000

8. What is the basis of the DEF shares received by EFG Co.?

a. ₱0
b. ₱1,000,000
c. ₱1,200,000
d. ₱1,300,000

9. Jong exchanged A Co. shares for B Co. shares in a consolidation:

* Basis: ₱1,200,000
* Fair Value given: ₱1,300,000
* Fair Value received: ₱1,100,000
* Other property received: ₱250,000
Compute CGT.
a. ₱0
b. ₱10,000
c. ₱20,000
d. ₱22,500

10. What is the tax basis of B Co. shares received by Jong?

a. ₱0
b. ₱1,100,000
c. ₱1,200,000
d. ₱1,350,000

11. What is the basis of the "boot" or other property received by Jong?
a. ₱0
b. ₱150,000
c. ₱250,000
d. ₱400,000
12. What is the basis of the A Co. shares received by B Co.?
a. ₱0
b. ₱1,100,000
с. Р1,200,000
d. P1,350,000