**INCOME TAX PHILIPPINES 1. Statement 1: All partnerships are taxed...

**INCOME TAX PHILIPPINES

1. Statement 1: All partnerships are taxed in the same manner as a corporation.

Statement 2: The income of a general commercial partnership is also subject to Regular Corporate Income Tax or

Minimum Corporate Income Tax whichever is higher.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

2. A taxable partnership may be subject to the following taxes:

I. Minimum corporate income tax

II. Regular corporate income tax

III. Improperly accumulated earnings tax.

a. I, II and III c. I and III only

b. I and II only d. I only

3. A partnership formed by persons for the sole purpose of exercising their common profession, no part of the income of

which is derived from engaging in any trade or business.

a. Joint venture

b. General professional partnership

c. Trading partnership

d. Joint accounts

4. A general professional partnership is exempt from income tax, but is required to file an income tax return

a. For statistical purposes.

b. Because the net income of the partnership will be traced into the income tax return of the partners.

c. Because all income earners are required to file income tax returns.

d. None of the above.

5. Which of the following statements is wrong?

a. A general partnership in trade is not taxable as a corporation.

b. A joint venture for undertaking construction projects is not taxable as a corporation.

c. A consortium for energy operations pursuant to an operating consortium agreement under a service contract with

the government is not taxable as a corporation.

d. A co-ownership where the activities of the co-owners are limited to the preservation of property and collection of

income from the property is not taxable as a corporation.

6. Statement 1: For purposes of computing the distributive share of the partners of a general professional partnership,

the net income of the partnership shall be computed in the same manner as a corporation.

Statement 2: Partners of a taxable partnership are considered as shareholders and profits distributed to them by the

partnership are considered as dividends.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

7. Statement 1: If a General professional partnership sustains net operating loss, the partners shall be entitled to deduct

their respective shares in the net operating loss from their individual gross income.

Statement 2: If a taxable partnership sustains net operating loss, the partners shall be entitled to deduct their

respective shares in the net operating loss from their individual gross income.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

8. The partner's share in the profits of a partnership is regarded as received by the partners although not yet distributed.

This concept of income reporting under the Tax Code is known as:

a. Installment basis of reporting income

b. Accrual basis of reporting income

c. Constructive receipt basis of reporting income

d. Hybrid method of reporting income

9. Statement 1: The partners comprising a GPP are allowed to avail the 8% income tax rate.

Statement 2: If a partner of GPP also derives other income from trade, business or practice of profession apart and

distinct from the share in the net income of a GPP, the deduction that can be claimed from the other income would

either be the itemized deductions or OSD.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

10. Statement 1: If the amount to be distributed to a partner of a GPP is more than P720,000, it is subject to 15%

creditable withholding tax.

Statement 2: The share of a partner in a GPP is subject to final withholding tax of 10% if the amount is below P720,000.

Statement 3: The distributive share of a partner in a commercial partnership is subject to final tax.

a. Statements 1, 2 and 3 are false

b. Only statement 3 is false

c. Only statement 2 is false

d. Statements 1, 2 and 3 are true