Ella Marie P.

Lopez
FIN195

Multiple Choices – Problems: Part 1

1. Mr. Dionisio sold domestic stocks directly to a buyer at a mark-up on cost of P200, 000. He
paid P5, 000 broker’s commission and P8, 000 documentary stamp tax on the sale. Compute
the capital gains tax.
a. P28, 050
b. P6, 000
c. P14, 200
d. P13, 700
200,000 -5,000 -8,000= P18,700
18,700 x 15% = P28,050
2. Mr. Abdul, a non-resident alien, sold domestic stocks directly to a buyer at a net gain of
P70,000. Compute the capital gains tax.
a. P10, 500
b. P6, 000
c. P4, 000
d. P3, 500
70,000 x 15% = P10,500
3. Mr. Panay, a non-resident citizen, sold domestic stocks directly to a buyer at a net gain of
P320, 000. Compute the capital gains tax.
a. P30, 000
b. P25, 000
c. P27, 000
d. P48, 000
320,000 x 15% = P48,000
4. Mr. Digos sold shares of a resident foreign corporation directly to a buyer. The shares were
purchased for P100, 000 and were sold at a net selling price of P210, 000. Compute the capital
gains tax.
a. P15, 000
b. P11, 000
c. P5,500
d. P 0
5. Grace sold domestic shares directly to buyer. The following relates to the sale:

Fair market value of shares P400, 000

Selling price 300, 000
Cost 150, 000
Compute the capital gains tax.
a. P7, 500
b. P9, 925
c. P15, 000
d. P22, 500
150,000 x 15% = P22,500
6. Texas Inc. exchanged its investments representing domestic shares for a piece of land owned
by Eagle, Inc.
Fair market value of shares P400, 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. P22, 163
b. P15, 000
c. P11, 000
d. P9, 988
300,000 x 1.5/200 = 2,250
500,000 – 350,000 - 2,250 x 15% = P22,162.50
7. Digong Inc. exchanged its shares investments from Bee Inc., as payment of its P350, 000 long
outstanding loan from the latter. Digong acquired the shares for P300, 000. Ignoring
documentary stamp tax, compute the capital gains tax on the transaction.
a. P 0
b. P7, 500
c. P5, 000
d. P2, 500
350,000 – 300,000 x 15% = P7,500
8. On January 5, 2020, Mercy, a stock dealer, disposed the following shares directly to a buyer:

Shares Selling price Cost

Stock rights P200, 000 P170, 000
Common stocks 100, 000 110, 000
Ignoring the documentary stamp tax, the capital gains tax payable on the sale is
a. P 0
b. P1, 000
c. P1, 500
d. P3, 000
9. Kidapawan, Inc., a domestic service company, has the following transaction on the sale of
another domestic corporation:

Transaction Quantity Net price

Purchase 20, 000 P40, 000
Purchase 30, 000 63, 000
Sale 40, 000 92, 000
Assuming the first-in, first-out method, compute the capital gains tax on the sale.
a. P 0
b. P480
c. P500
d. P6, 650
10. Assuming the moving average method, compute the capital gains tax on the sale.
a. P 0
b. P400
c. P500
d. P1, 440
11. Koron Company, a trading company, made the following transaction during the year
involving the stocks of Xurpas, a domestic corporation:

Date Transaction Shares Net price

6/15/2020 Purchase 10,000 P30
9/30/2020 Sale 8,000 28
10/3/2020 Purchase 15,000 25
12/7/2020 Sale 10,000 32
Koron uses the FIFO method in costing the Xurpas stocks.
Compute the taxable on the December 7 sale.
a. P20, 000
b.P16, 000
c.P12, 800
d. P0
12. Compute the taxable gain on the December 7 sale.
a. P64, 118
b. P60, 000
c. P51, 467
d. P44, 000
[P320,000 – (P2,000 x 30) – (P8,000 x 25)] = 60,000
13. Mr. Trinidad has the following transaction during the year on the common stocks of
Philippine Pines, a domestic non-listed company:
Date Transaction Gain (Loss)
5/8/2020 Sale P120,000
8/5/2020 Sale (10,000)
9/8/2020 Sale 250,000
Compute the annual capital gains tax due for 2020.
a. P54,000
b. P29,000
c. P22,000
d. P3,000
120,000-10,000+250,000 x 15% = P54,000
14. Mr. kalibo shows the following transaction in the shares of Aklan Corporation, a closely held
corporation;
Date Transaction Quantity Price
2/8/2020 Buy 10,000 P120,000
4/5/2020 Sell 10,000 100,000
5/1/2020 Buy 20,000 240,000
What is the tax basis of the shares acquired on May 1, 2020?
a. P300,000
b. P260,000
c. P240,000
d. P220,000
120,000-100,000+240,000 = P260,000
15. Mrs. Aurora, a resident citizen, purchased 100,000 shares of Philhotdogs, a domestic listed
company. The shares were acquired at P200,000. She disposed the shares through the
Philippine Stock Exchange at a fair value of P250,000.
Compute the capital gains tax.
a. P 0
b. P2,500
c. P7,500
d.P10,000
16. Mr. Bosun disposed various stocks at a total consideration of P400,000 and paid thereon
stock transactions tax of P2,000. Aggregate gains realized totaled P98,000 after the stock
transaction tax. What is the capital gains tax?
a. P 0
b. P4,900
c. P9,800
d. P14,700

Multiple Choice – Problems: Part 2

1. A certain tax payer shows the following over the counter transaction in the shares of a
domestic corporation:
Date Transaction Quantity Net price
3/8/2020 Purchase 10,000 P112,000
4/5/2020 Sale 10,000 100,000
5/1/2020 Purchase 8,000 80,000
6/7/2020 Sale 5,000 60,000
Compute the capital gain on June 7, 2020 that is subject to capital gains tax.
a. P4,000
b.P5,000
c.P10,000
d.P12,000
[(P112,000 – P100,000) x 8/10] = P89,600
P89,600/P8,000 = 11.2
[P60,000 –(P5,000 x 11.2)] = P4,000
2. An investor sold domestic stocks directly to a buyer on October 1, 2019 under the following
terms:
Selling price P500,000
Cost 200,000
Down payment 10%
Installments in 2019 50,000
Compute the total capital gains tax in 2019.
a. P45,000
b.P25,000
c.P9,000
d.P6,250
[(P50,000 dp + P50,000 inst.)/ P500,000] x P45,000 = P9,000
3. ABC realized the following gains or losses in selling various securities:
Gain on sale of domestic stocks P300,000
Par value of domestic stocks sold 200,000
Gain on the sale of interest in a partnership 200,000
Gain on the sale of stocks of foreign corporation 150,000
Compute the capital gains tax.
a. P45,000
b.P44,775
c.P35,000
d.P25,000
[(300,000 – P1,500) x .15 =P44,775
4. Compute the documentary stamp tax in the preceding problem.
a. P1,500
b.P1,125
c.P562.50
d.P750
[(P1.5/200) x P200,000] = P1,500
5. A wash sale of domestic shares wherein 20,000 shares were disposed at a loss of P40,000
were subsequently covered up within the 30-day period by a purchase of 15,000 shares for
P12/share.
The deductible capital loss against capital gain on the wash sale is
a. P 0
b. P13,333
c. P10,000
d. P20,000
5,000/20,000= 2.5 x 40,000= 10,000
6. What is the cost of the 15, 000 shares acquired in the preceding problem?
a. P150,000
b. P160,000
c. P180,000
d. P190,000
[(40,000 x 15,000/20,000)+ 160,000] = 190,000
7. Isidro sold 1,500 shares of stocks of Achievers Corporation directly to a buyer. The share’s par
value per shares was P85. Isidro purchased the shares for P90 each. On the date of sale, the
shares had a selling price of P120 per share.
What is the capital gains tax on the sale?
a. P2,625
b. P2,250
c. P6,607
d. P11,375
8. Mr. Palangdan purchased domestic stocks which were priced at 150% aboved their par
values. After two years, he sold the stocks when their fair value doubled. He paid P7,500.00
documentary stamp and P10,000 in commission expenses on the sale.
Compute the selling price of the stocks.
a. P3,000,000
b. P2,500,000
c. P1,500,000
d. P1,000,000
9. Compute the capital gains tax.
a. P143,625
b. P152,750
c. P153,725
d. P222,375
10. On June 20, 2019, Mr. Lito filed the capital gains tax return involving the sale of domestic
stocks on February 20, 2019. The net gain was P140,000. Compute the total amount due
including penalties except compromise penalty.
a. P26,880
b. P21,500
c. P11,700
d. P12,250

Multiple Choice – Problems: Part 3

1. A taxpayer purchased a building to be used as a future plant site. The building remained
unused for 3 years due to a significant decline in customer’s demand in product of the taxpayer.
The taxpayer eventually disposed the property. What is the classification of the property?
a. Ordinary asset
b. Capital asset
c. Either A or B at the discretion of the BIR
d. Either A or B depending on the intent of the buyer
2. Assuming the same data in the preceding number except that the property was not disposed
of but the same was used as a sales outlet after which it became vacant for more than two
years. What is the classification of the property?
a. Ordinary asset, regardless of the taxpayer
b. Capital asset, regardless of the taxpayer
c. Ordinary asset, if taxpayer is not engage in real estate business
d. Capital asset, if the taxpayer is not engaged in real estate business
3. Anderson disposes a vacant lot for P3,000,000. The lot has an Assessor’s fair value of
P2,800,000, a zonal value of P3,200,000, and an appraisal value of P3,500,000.
What is the capital gains tax?
a. P 0
b. P 180,000
c. P192,000
d. P210,000
(P3,200,000 x .06) =P192,000
4. Puerto Princesa Company sold its parking lot for P2,000,000. The capital gains tax on the sale
of the lot is
a. P 0
b. P108,000
c. P120,000
d. P150,000
parking lot- ordinary asset (exempted)
5. Mr. Antonio disposed hid principal residence for P2,000,000 and immediately acquired a new
one for P1,8000,000. The old residence cost Mr. Antonio P1,000,000 and had a fair market
value of P2,500,000 on the date of sale.
Compute the capital gains tax to be deposited in escrow.
a. P 0
b. P 60,000
c. P120,000
d. P150,000
(P2,500,000 x .06) = P150,000
6. What would be the tax basis of Mr. Antonio’s new residence?
a. P1,800,000
b. P1,000,000
c. P900,000
d. P800,000
(P1,000,000 x P1,800,000/ P2,000,000) = P900,000
7. How much of the capital gains tax will be released to the taxpayer?
a. P150,000
b. P135,000
c. P120,000
d. P15,000
(P150,000 x P1,500,000/P2,000,00) = 135,000
8. On August 15, 2020, Ms. Mones sold a 500-square meter residential house and lot for
P3,000,000. The house was acquired in 2005 at P2,000,000. The Assessor’s fair market values of
the house and lot was P5,000 per square meter.
What is the capital gains tax?
a. P180,000
b. P 120,000
c. P150,000
d. P240,000
(P5,000 x 500 + 1,500,000) x .06 = P240,000
9. Manny, a resident Filipino citizen, sold his principal residence (house and lot) at its original
purchase price of P11,000,000. The property had a P13,000,000 fair value at that time.
If the proceeds of the sale were not invested in the new principal residence but, instead, new
funds of P15,000,000 were used to construct it, the capital gains tax is
a. P 0
b. P660,000
c. P750,000
d. P780,000
(13,000,000 x .06) = P780,000
Numbers 10 through 12 are based on the following information:
Mr. Pepito sold his residential land in Manila with fair market value of P12,000,000 for
P10,000,000.
10. If Mr. Pepito utilized all of the P10,000,000 in buying a house and lot to be used as his new
principal residence, the final tax due from him is
a. P720,000
b. P600,000
c. P120,000
d. P 0
(12,000,000 x .06) = P720,000
11. Mr. Pepito utilized only P7,000,000 from the proceeds of the sale in acquiring a new
residence, the final tax due from him is
a. P720,000
b. P216,000
c. P180,000
d. P 0
12. The documentary stamp tax due on the sale is
a. P179,895
b. P180,000
c. P149,985
d. P150,000