Gross income from business

Rent received
Income received from trust
Gross income from business
Compensation income
Business expense
Taxable Income

Tax due
Less: CWT on rent
CWT on trust
WTW
Still due

Shairabelle. has the following transactions during 7 years in operation:

Year 1 Year 2 Year 3

Sales 200,000 240,000 288,000
Cost of sales 150,000 180,000 216,000
Business expenses 40,000 48,000 66,240
Long term Capital gain 20,000 2,000 9,000
Short term Capital gain 10,000 1,500 500
Long term Capital loss 5,000 6,000 3,000
Short term Capital loss 2,500 2,500 1,000

SOLUTIONS: Year 1 Year 2

Gross business income 50,000 60,000
CG - LT (50%) 10,000 1,000
CG - ST 10,000 1,500
Total capital gain 20,000 2,500
CL - LT (50%) (2,500) (3,000)
CL - ST (2,500) (2,500)
Net capital gain (loss) 15,000 15,000 (3,000) Bawal
NCLCO
Gross income 65,000 60,000
Business expense (40,000) (48,000)
Taxable 25,000 12,000

Forfeited

SOLUTIONS: Year 1 Year 2

Gross business income 50,000 60,000
CG - LT (50%) 20,000 2,000
CG - ST 10,000 1,500
Total capital gain 30,000 3,500
CL - LT (50%) (5,000) (6,000)
CL - ST (2,500) (2,500)
Net capital gain (loss) 22,500 22,500 (5,000) -
Gross income 72,500 60,000

SALE OF PRINCIPAL RESIDENCE

A family home was sold for 2,000,000 with a fair market value of 2,200,000. Cost is 1,500,000.
Compute the CGT and the cost of new family home in the following cases:
Case 1 None of the proceeds from the sale were fully utilized in the acquisition of a new family home
Case 2 Only 80% of the proceeds from the sale were fully utilized in the acquisition of a new family h
Case 3 The proceeds from the sale were fully utilized in the acquisition of a new family home.
Case 4 The proceeds from the sale were fully utilized in the acquisition of a new family home. The ac
cost of the new family home amounted to 2,500,000.

Case 1 CGT 2,200,000 6% 132,000

Cost of New Family Home None
Case 2 Unutilized portion 400,000 Cost of old
Divided by: GSP 2,000,000 1.60
20% Cost of new residence
CGT on higher bet GSP and FV 132,000
CGT on the unutilized portion 26,400

Case 3 CGT None

Cost of new residence 1,500,000

Case 4 CGT None Cost of old

Excess of Cost of new over GSP
2,500,000
Cost of new

STOCK TRANSACTIONS - WASH SALES

PROBLEM 1 - within 30 days prior to sale
3/1/2018 Purchased 2,000 shares for ₱40 each
4/20/2018 Purchased 1,000 shares for ₱50 each

Case 1 5/15/2018 Sale of 500 shares for ₱60 each

Case 2 5/15/2018 Sale of 500 shares for ₱30 each
Case 3 5/15/2018 Sale of 1,200 shares for ₱60 each
Case 4 5/15/2018 Sale of 1,200 shares for ₱30 each
Case 5 5/15/2018 Sale of 2,200 shares for ₱30 each

Case 1 Case 2 Case 3 Case 4

1,200 1,000
Selling price 30,000 15,000 72,000 36,000 30,000
Cost
40.00 500.00 (20,000) (20,000)
40.00 1,200.00 (48,000) (48,000) (40,000)
Gain (Loss) 10,000 (5,000) 24,000 (12,000) (10,000)
Nondeductibl
Cost of purchase
50.00 500.00 25,000
 50.00 1,000.00 50,000
50.00 800.00
Deferred loss on wash sales 5,000 10,000
Cost of purchase within 61 day period 30,000 60,000

PROBLEM 2 - within 30 days after sale

2/1/2018 Purchased 2,000 shares for ₱30 each
5/2/2018 Purchased 1,000 shares for ₱45 each

Case 1 4/12/2018 Sale of 600 shares for ₱60 each

Case 2 4/12/2018 Sale of 600 shares for ₱30 each
Case 3 4/12/2018 Sale of 1,300 shares for ₱60 each
Case 4 4/12/2018 Sale of 1,300 shares for ₱30 each

PROBLEM 3 - within 30 days prior and after sale

Units Cost Total
3/1/2018 Purchase 3,000 20 60,000
4/2/2018 Purchase 2,000 25 50,000
5/25/2018 Purchase 500 22 11,000

Case 1 4/27/2018 Sale of 2,300 shares for ₱30 each

Case 2 4/27/2018 Sale of 2,300 shares for ₱15 each
Case 3 4/27/2018 Sale of 2,600 shares for ₱30 each
Case 4 4/27/2018 Sale of 2,600 shares for ₱15 each

PROBLEM 3 - Complex stock transactions

Units Cost Total
3/1/2018 Purchase 3,000 30 90,000
4/2/2018 Purchase 2,000 35 70,000
4/22/2018 Sale, at 32 each 1,500
4/28/2018 Sale, at 29 each 2,000
6/17/2018 Purchase 5,000 32 160,000
7/2/2018 Sale, 34 each 2,500
8/6/2018 Purchase 4,000 33 132,000

REGULAR AND INSTALLMENT SALES OF REAL PROPERTIES

ABC Company, a real estate company, has the following real properties:

Inventory, 100,000 sqm

Land used in business as property, plant and equipment, 20,000 sqm
Investment property, 30,000 sqm

ABC has the following transactions during the year:

(a) Sold 5,000 sqm from inventory for ₱4,000 per sqm
(b) Sold 15,000 sqm from inventory for ₱5,000 per sqm, payable in two equal annual
installments, starting in the year of sale.
(c) Land of 1,000 sqm was sold for ₱6,000 per sqm, unpaid mortgage of 100,000 to be
assumed by the buyer
(d) Land of 2,500 sqm was sold for ₱7,500 per sqm, payable in three equal annual
installments, starting in the year of sale.
(e) Investment property of 400 sqm were sold for ₱1,750 per sqm, with unpaid mortgage of
₱1,800,000 to be assumed by the buyer.
(f) Investment property of 600 sqm were sold for ₱2,300 per sqm, payable in four equal
annual installments, starting in the year of sale. Unpaid mortgage on the property
amounted to ₱2,600,000 which will be assumed by the buyer.
2,000,000
900,000
300,000
3,200,000
152,000
(500,000)
2,852,000

762,640
(45,000)
(45,000)
(2,000)
670,640

Year 4 Year 5 Year 6 Year 7

346,000 311,000 280,000 252,000
259,500 233,250 210,000 189,000
83,040 62,200 56,000 50,400
None 15,000 2,800 9,000
2,000 500 None 4,000
10,000 2,500 2,000
3,000 800 1,800 12,000

Year 3 Year 4 Year 5 Year 6

72,000 86,500 77,750 70,000
4,500 None 7,500 1,400
500 2,000 500 None
5,000 2,000 8,000 1,400
(1,500) (5,000) (1,250) (1,000)
(1,000) (3,000) (800) (1,800)
2,500 (6,000) Bawal 5,950 (1,400) Bawal'
(2,500) (3,460) 2,490
72,000 86,500 80,240 70,000
(66,240) (83,040) (62,200) (56,000)
5,760 3,460 18,040 14,000

500 2,540

Year 3 Year 4 Year 5 Year 6

72,000 86,500 77,750 70,000
9,000 15,000 2,800
500 2,000 500 None
9,500 2,000 15,500 2,800
(3,000) (10,000) (2,500) (2,000)
(1,000) (3,000) (800) (1,800)
5,500 5,500 (11,000) - 12,200 12,200 (1,000) -
 77,500 86,500 89,950 70,000

ost is 1,500,000.

ition of a new family home.

cquisition of a new family home.
a new family home.
a new family home. The acquisition

1,500,000
2 80%
1,200,000

1,500,000
st of new over GSP
2,000,000 500,000
2,000,000

Case 5
200 800 1,400
6,000 24,000 42,000

(8,000) (32,000) (58,000) 1,200 40

(2,000) (8,000) (16,000) 200 50
Deductible Nondeductibl Deductible
 40,000
8,000
48,000

###
50,000,000
###

o equal annual

of 100,000 to be

equal annual
h unpaid mortgage of

yable in four equal

on the property
 Year 7
63,000
4,500
4,000
8,500
None
(12,000)
(3,500)

63,000
(50,400)
12,600

1,400

Year 7
63,000
9,000
4,000
13,000

(12,000)
1,000 1,000
64,000