CANADIAN AND FEDERAL INCOME TAXATION PRACTICE 100+ DETAILED QUESTIONS WITH CORRECT ANSWERS 2023-2024

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CANADIAN AND FEDERAL INCOME TAXATION PRACTICE 100+ DETAILED QUESTIONS WITH CORRECT ANSWERS 2023-2024 Statement 1 : Congress can exercise the power of taxation even without Constitutional delegation ... of the power to tax. Statement 2 : Only the legislature can exercise the power of taxation, eminent domain and police power. Which statement is correct? Both statements are true a. The benefit received theory explains that the government is obliged to serve the people since it is benefiting from the tax collection from its subjects. b. The lifeblood theory underscores that taxation is the most superior power of the State. c. The police power of the State is superior to the non-impairment clause of the Constitution. d. The power of taxation is superior to the non-impairment clause of the Constitution. c. The police power of the State is superior to the non-impairment clause of the Constitution. a. Since there is compensation, eminent domain raises money for the government. b. Once a government is established, taxation is exercisable. c. The most important of the power is taxation. d. Police power is more superior than the non-impairment clause of the Constitution. a. Since there is compensation, eminent domain raises money for the government. The following statements reflect the differences among the inherent powers except: Eminent domain and police power do not require constitutional grant but taxation being a formidable power requires constitutional grant a. The power to tax includes the power to exempt. b. Exemption is construed against the taxpayer and in favor of the government. c. Tax statutes are construed against the government in case of doubt. d. Taxes should be collected only for public improvement. d. Taxes should be collected only for public improvement. Which of the following is not a constitutional limitation of the power to tax? D. non delegation of taxing power Which of the powers of the State is the most superior? Which is regarded as the most important? B. police power, taxation Which is not a characteristic of tax? C. it is subject to assignment A. Tax must not violate constitutional and inherent limitation. B. Tax must be uniform and equitable. C. Tax must be for public purpose. D. Tax must be levied by the law-making body. E. Tax must be proportionate in character. F. Tax is generally payable in money. Which of the above is/not an essential characteristic of a valid tax? none of these choices . Mr. A has a tax obligation to the government amounting to P80,000. Since he is leaving the country, he entered into a contract with Mr. B wherein Mr. B shall pay the P80,000 tax in his behalf . On due date, Mr. B failed to pay the tax. The BIR sent a letter of demand to Mr. A which he refused to pay. Which of the following statements is correct? d.The government should force mr. A to pay because taxes are non-assignable The Commissioner of Internal Revenue is not authorized to d.grant amnesty for erring taxpayers The principles of sound tax system exclude a. Economic efficiency . Which of the following is a power of the Commissioner of Internal Revenue? a. The power to conduct inventory surveillance As to tax payment measures, which of the following threshold for the qualification as large tax payer is incorrect? b. Annual value added tax payment of 1 million t of 1 million 15. Which is not subject to income tax? donation . Which is not an item of gross income because f the absence of an undertaking from the taxpayer? b. Forgiveness of indebtedness as an act of a gratuity Juan, a resident alien, and Pedro, a non-resident alien, executed a contract of sale in Japan whereby Pedro shall purchase the lot owned by Juan in the Philippines. Juan gains P1,000,000 in the exchange. Which is true? d. the gain is subject to Philippine tax because the property is in the philippines . Pines Corporation has a branch in manila and a 70% owned subsidiary, Choco Hills, Inc. in Davao. The following date shows Pines Corporation's sales transaction during the year : Pines Corporation billed the Manila branch P1,500,000 for merchandise shipped to the latter at a mark-up of 50% above acquisition cost. The branch stored the merchandise and did not operate during the year. Sold merchandises to unrelated parties at a gain of P800,000. Sold merchandise to Darrel Asuncion, Pines Corporation's controlling stockholder, at a gain of P100,000 Sold various merchandise to Choco Hills, Inc. at a gain of P200,000. Compute the total income of Pines Corporation subject to income tax c. 1,100,000 (800k+100k+200k) An alien received P200,000 compensation income in the Philippines and P300,000 rental income from abroad. How much will be subject to Philippine income tax? P200,000 A non-resident citizen is an international financier who earned P400,000 interest income from resident debtors and P300,000 from foreign debtors. How much is subject to Philippine income tax? P400,000 Sarah has the following items of income : Philippines Abroad Business Income P200,000 P100,000 Professional Fees P100,000 P 50,000 Compensation Income P400,000 - Rent Income P300,000 P200,000 Interest Income P 30,000 P 40,000 Assuming Sarah is a resident citizen, compute the total income subject to Philippine income tax d. 1,420,000 (1,030,000+390k) . Assuming Sarah is a resident alien, compute the total income subject to Philippine income tax c. 1,030,000 phil tax only Assuming Sarah is a resident corporation, compute the total income subject to Philippine income tax. d. 1,030,000 phil tax only Assuming Sarah is a domestic corporation, compute the total income subject to Philippine income tax d. 1,420,000 (1,030,000 + 390k) Which is a correct statement regarding income taxes? 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