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III. Problem 1 - 122601

1. A domestic corporation had a taxable income of $80,000 in 2021 based on gross income of $360,000, expenses of $280,000, and a net capital loss of $20,000. 2. In 2022, the same domestic corporation had a taxable income of $210,000 based on gross income of $500,000, expenses of $350,000 and a net capital gain of $60,000. 3. A resident citizen had a taxable income of $80,000 in 2021 based on the same gross and expense amounts as the corporation in 2021, but with a net capital loss of $40,000 due to long term capital losses being deduct

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142 views1 page

III. Problem 1 - 122601

1. A domestic corporation had a taxable income of $80,000 in 2021 based on gross income of $360,000, expenses of $280,000, and a net capital loss of $20,000. 2. In 2022, the same domestic corporation had a taxable income of $210,000 based on gross income of $500,000, expenses of $350,000 and a net capital gain of $60,000. 3. A resident citizen had a taxable income of $80,000 in 2021 based on the same gross and expense amounts as the corporation in 2021, but with a net capital loss of $40,000 due to long term capital losses being deduct

Uploaded by

Everly Mae Elondo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

III.

Problem 1
1. Taxable net income in 2021 assuming the taxpayer is a domestic corporation.
Gross Income P360,000
Business Expenses (280,000)
Add: Net Capital Gain
Short term capital loss (@100%) (60,000)
Long terms capital loss (@100%) 40,000
Net Capital Gain (loss) (20,000) -
Net Taxable Income in 2021 P80,000
*Capital losses are deductible only from capital gains.
* Holding period and capital loss carry-over are not applicable to corporate taxpayers.

2. Taxable net income in 2022 assuming the taxpayer is a domestic corporation.


2021
Gross Income P500,000
Business Expenses (350,000)
Net Capital Gain
Short term capital gain (@100%) 80,000
Capital loss (@100%) (20,000) 60,000
Net Taxable Income in 2022 P210,000

3. Taxable net income in 2021 assuming the taxpayer is a resident citizen.


Gross Income P360,000
Business Expenses (280,000)
Add: Net Capital Gain
Short term capital loss (@100%) (60,000)
Long terms capital loss (@50%) 20,000
Net Capital Loss 2021 (40,000) -
Net Taxable Income in 2021 P80,000

4. Taxable net income in 2022 assuming the taxpayer is a resident citizen.


Gross Income P500,000
Business Expenses (350,000)
Add: Net Capital Gain
Short term capital loss (@100%) 80,000
Long terms capital loss (@50%) (10,000)
Net Capital Loss carry over (NCLCO) from 2021 (40,000) 30,000
Net Taxable Income in 2022 P120,000
*NCLCO must not be the taxable income during the year the net capital loss was incurred. Capital loss is
deductible only to the extent of capital gain.

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