Income Tax on Special Corporations Read and analyze the following scenarios and apply the principles and concept of income taxation on special corporations. Pioneer College, a private educational institution, has presented the following data for the year: Gross Income, related activities P5,000,000 Gross Income, unrelated activities (except rental income) 5,000,000 Rental income (gross of 5% WT) 2,000,000 Expenses, related activities 2,000,000 Expenses, unrelated activities 3,000,000 Dividend income from a domestic corporation 100,000 Quarterly income tax paid for the first three quarters 500,000 Compute the income tax payable.
Income Tax on Special Corporations
Read and analyze the following scenarios and apply the principles and concept of income
- Pioneer College, a private educational institution, has presented the following data for the year:
|
Gross Income, related activities |
P5,000,000 |
|
Gross Income, unrelated activities (except rental income) |
5,000,000 |
|
Rental income (gross of 5% WT) |
2,000,000 |
|
Expenses, related activities |
2,000,000 |
|
Expenses, unrelated activities |
3,000,000 |
|
Dividend income from a domestic corporation |
100,000 |
|
Quarterly income tax paid for the first three quarters |
500,000 |
Compute the income tax payable.
- Advanced Learning Institute, an educational institution, provided the following data for the current taxable year:
|
Income from tuition fees |
P 3,500,000 |
|
School Miscellaneous Fees |
1,500,000 |
|
Dividend Income: |
|
|
Domestic Corporation |
2,000,000 |
|
Foreign Corporation |
2,000,000 |
|
Rent Income (Net of 5% withholding tax) |
1,900,000 |
|
Operating Expenses |
4,000,000 |
Compute the tax payable of the school.
- Norte De University, a proprietary educational institution, has the following selected information for the taxable year 2X18:
|
Tuition Fees |
P 12,800,000 |
|
Miscellaneous Fees |
1,800,000 |
|
Interest on Bank Deposits |
12,300 |
|
Rent Income |
350,000 |
|
Salaries and Bonuses, all personnel |
7,500,000 |
|
Other Operating Expenses |
3,500,000 |
|
Quarterly Income Tax Payments |
48,000 |
An additional school building was built and finished on April 1, 2X18 at the cost of P2,000,000 with a depreciable life of 50 years.
- Compute the income tax payable assuming the university opted to claim the cost of construction as an outright
- Compute the income tax payable assuming the university opted to capitalize the cost of building
- A non-profit domestic hospital has the following data during the year 2x18:
|
Gross income from hospital operation |
P2,000,000 |
|
Operating Expenses (excluding depreciation for the new hospital building) |
500,000 |
|
Rent income of commercial space, hospital ground floor, net of 5% withholding taxes |
190,000 |
|
Interest on bank deposit, net of 20% withholding tax |
40,000 |
|
Dividend income from a domestic corporation |
100,000 |
An additional hospital building was built and finished on June 30, 2X18 at the cost of P4,000,000 with a depreciable life of 25 years.
- Compute the income tax still due and payable in
- Assume the hospital was organized for profit, compute the income tax still due and payable in
- Pacific Airlines, an international carrier, showed the following gross receipts for 2X18:
|
Point of Origin |
Destination |
Gross Receipts |
|
Philippines |
United States of America |
P 8,000,000 |
|
United States of America |
United Kingdom |
4,000,000 |
|
United States of America |
Philippines |
3,750,000 |
|
United Kingdom |
Philippines |
2,100,000 |
Additional information:
- Forty percent (40%) of the shipments from the Philippines to the United States were later shipped to the United
- Twenty-five percent (25%) of all its revenues were from the transport of cargoes and
Compute the income tax payable for 2X18.
- China Airlines , a resident foreign corporation, has the following data for the taxable year 2x18:
|
Passengers airfare from China to the Philippines |
P 1,800,000 |
|
Passengers airfare from the Philippines to China |
1,500,000 |
|
Airfare for cargoes from China to the Philippines |
700,000 |
|
Airfare for cargoes from the Philippines to China |
1,300,000 |
Compute the income tax payable.
- Y Corporation, a family-closed corporation, had the following selected data for 201A, the
accumulated earnings for which year the BIR considered to be improper:
|
Non-taxable gain on life insurance of Y Co.’s president |
P900,000 |
|
Income tax due 201A |
780,000 |
|
Quarterly income tax paid |
580,000 |
|
Dividend declared and paid during the year |
440,000 |
|
Reserve for maturing bonds in 201B |
300,000 |
|
Tax-exempt dividend income from resident corporation |
200,000 |
|
Net-operating loss carry-over (NOLCO) deducted |
100,000 |
|
|
85,000 |
|
Interest income on peso deposit, net of final tax |
16,000 |
Compute the amount of improperly accumulated earnings tax (IAET).
- A closely-held corporation, deemed committed unreasonably accumulating its income, shows the following data:
|
Paid-up capital |
P 10,000,000 |
|
Accumulated Earnings – unrestricted |
8,000,000 |
|
Accumulated Earnings – restricted |
2,000,000 |
|
Income tax per annual income tax return |
300,000 |
|
Income tax for the first three quarters |
240,000 |
|
Final tax on passive income at 20% |
60,000 |
|
|
45,000 |
Compute the amount of improperly accumulated earnings tax (IAET).
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