Problem Set - Exclusions From Gross Income: Directal 7520,000

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PROBLEM SET – EXCLUSIONS FROM GROSS INCOME

PROBLEM 1. LIFE INSURANCE CONTRACTS

Joey is insured in a P 5,000,000 life insurance policy. The policy requires annual premium payments of P 100,000
for 10 years. If Joey outlives the policy after the 10 years, he will be paid a P 1,500,000 maturity value. Compute
for the exclusions from gross income for each independent situation:
a. Joey has died on the 8th year of coverage and his heirs received P 5,000,000 proceeds. F5,000,000 =>

b. Joey’s insurance company asked for an extension of payment of proceeds and will pay P 5,200,000.
-
c. Joey outlived the policy and collected the maturity value of P 1,500,000.
-
d. Joey assigned the policy to Chandler for P 500,000 after 4 years of paying annual premium payments.

PROBLEM 2. PROPERTY INSURANCE CONTRACTS

Phoebe Company secured a fire insurance covering the half of its commercial building for P 600,000. The building
was destroyed by fire when the current value of the building was P 2,000,000. The company recovered the
insurance proceeds in full. Determine the exclusion from gross income.

PROBLEM 3. COMPENSTION FOR INJURIES

Ross was hit by a taxi. He paid P 70,000 for hospitalization expenses. The court awarded him a total indemnity
of P 600,000 after he sued the taxi driver. The breakdown is as follows:
>directal for injury

Moral damages P o
450,000
Reimbursement of hospital bills - 7520,000
70,000
Lost salary 80,000
↳ inclusion in al

Determine the exclusions from gross income.

PROBLEM 4. STATE MANDATED CONTRIBUTIONS

Rachel has a gross compensation of P 500,000 in 2022. His employer deducted the following from his income:
-

50," 000)
SSS Contributions P 15,000
0
=

PhilHealth Contributions 12,000


HDMF Contributions 9,000
Labor union dues 6,000
Creditable withholding tax 90,000 44,500

Determine the gross taxable compensation income. 90,000


-

PROBLEM 5. BARANGAY MICRO-BUSINESS ENTERPRISES 0

Monica has a restaurant with total assets of P 3,500,000 inclusive of a lot with book value of P 1,000,000. The
following are her transactions for the year:

Gross income – food sales P-


250,000
Interest on promissory notes -15,000
Royalties – sale of recipe books 10,000
Dividend income from domestic stock 6,000 FI
-

Determine the exclusions from gross income. 265,000


Problem 1

a) F5,000,000
b) Return of premiu
taxable
-

5,000,000 exclusion from gross income 5,000,000 exclusion;200,000 interest


income
for gross
200,000 interest
Is taxable

C) Total Proceeds * 1,550,000

Return premium
of 1,000,000
ROC
-
500,000
I - -

d) Total Proceeds

premium
#

Return of

ROC

Problem 2

Total proceeds 600,000


* exclusion

Di
-

Return of
Premium 1,000,000

ROC
#000-

Problem 3

450,000
damages
#

moral

Reimbursement of hospital bills 70,000

20
Problem 4

500,000

2022:
(15,000) 44,508

(12,000) *458,000
=

44,500
- 190,000)
-
-
(9,000) 0

(6,000) Walang babayaram
Problem 5

Gross Income -

food sales * 250,000

intereston promissory notes 15,000

*
265,000

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