Gross Income

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CHAPTER 8

DEDUCTIONS FROM GROSS INCOME

Problem 8 – 1 DEDUCTIBLE OR NONDEDUCTIBLE FROM GROSS INCOME

|1. Deductible |11. Nondeductible | |2. Nondeductible |12. Deductible | |3. Nondeductible |13. Deductible | |4. Deductible, in lieu of tax credit (Sec. 34C3, NIRC) |14. Deductible | |5. Deductible |15. Nondeductible | |6. Nondeductible |16. Nondeductible | |7. Nondeductible |17. Nondeductible | |8. Deductible |18. Deductible | |9. Deductible |19. Deductible | |10. Nondeductible |20. Deductible |

Problem 8 – 2 TRUE OR FALSE

1. True
2. True
3. False – Business expenses related to business income outside the Philippines is deductible also. 4. False – Business expense is deductible from gross income. 5. True
6. True
7. True – Once OSD is opted, no capital loss could be deducted from capital gain. 8. False – Some business expenses are nondeductible or subject to limit. 9. False – Income outside the Philippines by a NRC is not taxable in the Philippines, hence, no allowable deduction is allowed. 10. True

11. False – Compensation income is not subject to OSD.
12. False – NOLCO is not an itemized deduction.
13. True – Amortized over the term of the lease
14. False – ½ of 1%
15. False – 33%
16. False – Double –declining method
17. True
18. True

|Problem 8 – 3 |Problem 8 – 4 |Problem 8 – 5 |Problem 8 – 6 | |1. B |1. C |1. A |1. A | |2. No choice, OSD=40% |2. A |2. A |2. C | |3. D |3. D |3. C |3. A | |4. D |4. A |4. C |4. C | |5. D |5. B |5. A |5. C | |6. C |6. B |6. D |6. C | |7. B |7. A |7. C |7. B | |8. D |8. A |8. A |8. C | |9. B |9. D |9. B |9. C | |10. C |10. A |10. C |10. C | |11. C | | |11. D | |12. D | | |12. B...
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