Questions and Answers
Which theory in taxation states that without taxes, a government would be paralyzed for lack of power to activate and operate it, resulting in its destruction?
The actual effort exerted by the government to effect the exaction of what is due from the taxpayer is known as:
Although the power of taxation is basically legislative in character, it is NOT the function of Congress to:
An example of a tax where the concept of progressivity finds application is the:
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Is the leased portion subject to real property tax?
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Which among the following concepts of taxation is the basis for the situs of income taxation?
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Which of the following transactions is deemed a taxable gift?
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Which of the following statements relative to donor’s tax is false?
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What is the most efficient mode of donating a parcel of land with a zonal valuation of P420,000?
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Exempted from donor’s taxation are gifts made:
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What is the donor's tax implication on Caroline’s donation of P110,000.00 to her friend Vicky who was getting married?
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Study Notes
Basic Principles of Taxation
- Lifeblood theory posits that taxes are essential for government functionality, likening taxation to a lifeblood that prevents governmental paralysis.
- The government’s effort to collect taxes is termed "Collection," while "Assessment" refers to determining the amount due.
- Congress's role in taxation is primarily legislative; it does not collect taxes or fix their exact amounts.
- The income tax on individuals exemplifies a progressive tax, where tax rates increase with income.
- Ligaya Educational Foundation, organized for profit, leasing school property raises questions about tax liability; if maintained for educational purposes, it may not incur real property tax but could face income tax on rentals.
- The situs of income taxation is grounded in concepts like the Lifeblood doctrine, establishing jurisdiction for tax collection.
Donor's Tax
- Taxable gifts include the remission of a debt and underpriced sales of properties, both considered taxable transactions.
- False claims about donor’s tax may include misconceptions of property and exemption rules pertaining to spouses and children.
- Spreading donations over multiple years can optimize tax benefits; for example, spouses can each donate portions of property value across five years to utilize exemptions effectively.
- Gifts made for public benefit, such as those for barangays or schools, are often exempt from donor's taxation.
- Caroline's donation of P110,000 to Vicky includes a tax exemption on the first P100,000, as it is given in consideration of marriage, highlighting limits on taxable amounts for gifts.
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Description
Explore the fundamental concepts of taxation including the lifeblood theory, the roles of collection and assessment, and the progressive nature of income tax. This quiz also delves into the specifics of donor's tax, taxable gifts, and their implications for both individuals and organizations.
