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1. Mr. Peralta bought a 200 sq. m. subdivision lot at P3,000.00/sq. m.

He paid 25% down payment and the balance payable in 120 equal amortizations at 21% interest per annum. He has paid 84 monthly amortizations totalling P737,612.60 inclusive of penalty interest of P32,000.00. Compute for his cash surrender value under the Maceda Law.

2. A perimeter wall will be constructed on a 240 sq. m. regular lot having a frontage of 12 meters. The wall is one meter below and 3 meters above ground. If cost is P400.00 sq. m. compute for the total cost of the wall excluding a 3 meter wide gate.

3. In a sale of condominium unit the following information were gathered:


Value per Deed of Sale ....P3,000,000.00 Zonal Value of Condominium Unit ..P22,500.00/sq.m. Market Value of Condominium Unit ...P1,500,000.00 Assessor Value of land where the Condominium Unit is built ..P2,500.00/sq.m. Zonal Value where the Condominium project is Built .P5,000.00/sq.m. Floor area of the condominium unit sold 150 sq. m.

Compute for the Capital Gains Tax on the above transaction.

4. Mr. Samson hired the services of a broker to sell his property. The owner said he bought it at P6,300,000.00 and wants a 30% gross profit. If you were a broker, at how much would you sell the property? If you will be paid 5% commission, how much shall be added to the selling price that the 30% profit of Mr. Samson will not be affected?

5. A corporation bought 50 hectares of land for P700.00/ sq. m. If high-end development costs P1,000.00/ sq. m. based on saleable area which is 60% of the gross are, compute for the following:

Total land acquisition cost Total development cost Total unit cost per sq. m. of the saleable lots If the projected gross mark up is 100% of the total unit cost/sq. m. of saleable lots, what will be the selling price per sq. m.?

6. An 800 sq. m. lot with improvement was sold for P3,500,000.00. Per tax declaration, the fair market value of the improvement is P1.5M and lot is P1.6M. The zonal value of the lot is P3,500.00/sq. m. The sale is subject to capital gains tax.
Compute the tax base How much is the capital gains tax? How much is the documentary stamps?

7. A corporation owns two adjoining lots. Lot 1 with an area of 1,000 sq. m. and Lot 2 with an area of 800 sq. m. Recently, it sold Lot 1 at P2,000/sq. m. with 20% down payment and the balance payable in 5 years at the rate of P43,200.00 equal monthly amortizations. If the corporation will sell Lot 2 at the same price and terms as Lot1, compute the total amount of interest it will receive for Lot 2 after it has been fully paid in five years assuming the buyer is regular in payment.

8. Jose bought a 1,060 sq. m. lot at P1,400/sq. m. on instalment basis with 50% down payment and the balance payable in 5 years at 21% interest per annum. After 3 regular monthly amortizations, he decided to pay in full the balance. Compute the following: (Factor is 0.02705)

Amount of down payment Monthly amortization Interest expense for 3 months Balance after 3 months Final cost sq. m. after full payment

9. A developer is selling a house and lot package at P950,000.00 per unit.


Compute the expanded withholding tax and

documentary stamps. How much is the value added tax?

10. A corporation is the lesser of a 7-door residential apartment with a monthly rental as follows: 3 doors at P10,000.00 each and 4 doors at P12,000.00 each. It incurred P30,000.00 worth of VAT-invoiced expenses for repair and maintenance for January, 1998. Compute the VAT payable for January 1998.

11. Mr. Tan bought a subdivision lot for P500,000.00. He paid a 20% down payment, balance payable in 5 years at 21% interest per annum. The lot was contracted in December, 1994 and his monthly amortization starting January, 1995 is P10,820.00 E-VAT was implemented effective January, 1996.
Is his payment starting January 1996 subject to E-

VAT? Why? How much is the total monthly amortization as of May 1996?

12. Gross sales receipts of a VAT-registered developer for 1996 were P1,100,000.00 for January, P1,650,000.00 for February; and P880,000.00 for March. Purchase from VAT-registered suppliers were P660,000.00 for January; P770,000.00 for February; and P550,000.00 for March. Compute for the a) Output Tax: b) Input Tax; c) VAT payable for the months of January, February, and March.

13. A real estate developer offers three house and lot packages as follows: a) P450,000.00 per unit in Cabanatuan City; b) P900,000.00 per unit in Sta. Rosa, Laguna; and c) P2,100,000.00 per unit in Quezon City. Compute the expanded withholding tax for each package.
14. The title of the property describes the land as consisting of 6 hectares, 75 ares, and 800 centares. What are the area of the land in square meters?

15. A real estate broker has a listing where the seller agreed to shoulder capital gains tax and broker's 5% commission. At how much should the broker sell the property in order that the seller will realize a net proceed of P4,895,000.00?

16. An investor bought an apartment property for P45M. The property earns a monthly income of P300,000.00 and its annual fixed and operating expenses total P400,000.00. What is his rate of return on investment?

17. A 3-hectare land was sold for P300.00sq. m. and the seller agreed to pay commission based on the following rate: 5% for the first P1,000,000.00; 4% for the next P1,500,000.00; and 3% on the excess over P2,500,000.00. Compute for the gross commission of the listing broker and selling broker if they agreed to 40%-60% sharing in favour of the selling broker.

18. Mr. Roces pays monthly amortization of P54,100.00 for a parcel of land. The amortization factor for 5 years at 21% interest is 0.02705. If M. Roces paid a down payment of 20% of the contract price, compute the following:
The principal obligations on which the monthly

amortization is based The contract price The amount of down payment

19. Ms. Reyes obtained mortgage loans of P600,000.00 and made quarterly payments of P50,000.00 plus interest of 16% per annum. How much did he pay for the first year?

20. Mr. Cui is into land banking. He bought a 3hectare raw land of P10/sq. m.
If his cost of money is compounded 100% every 5

years, what will be his cost after 20 years? If he will sell the land for P200/sq. m. after 20 years, what will be his gross profit?

21. At how much should Adora sell her property acquired at P6,300,000.00 if she desired a 30% gross profit rate? 22. The sale of lots with an area of 100 sq. m. each is ten per month. The selling per lot is P3,000./sq. m. with 15% down payment and the balance payable in 5 years with interest at 18% per annum. If there are only 35 lots in the project and amortization starts 30 days after the signing of the contract, what is his total monthly amortization as of the fifth month? (Factor is 0.025393)

23. A broker, before offering to his client a hectare land for low-cost housing, prepared a simple profitability statement. The estimated development cost is P300/sq. m. based on the gross area. Construction cost of the 100 housing units is P3,000.00/sq. m. with each unit having a floor area of 60 sq. m. The land is being offered at P300/sq. m. and the selling price per housing unit is P450,000.00. How much is his gross profit?

24. A 4-door apartment is being rented for P6,000.00 per door, and is subject to annual maintenance of P14,400.00 and realty tax of P6,000.00. A buyer for the property is satisfied with a 12% return on investment. At how much should he buy the property? 25. Emma buys a property at P150,000.00. She paid as follows: P50,000.00 down payment; P30,000.00 at the end of the first year; P40,000.00 at the end of the second year; and final payment at the end of the fourth year. Compute for her final payment if interest is 14% per annum?

26. Mr. Blue sold to Mrs. Reed in June 1997 a residential lot for P960,000.00 inclusive of a P100,000.00 mortgage to be assumed by the buyer. Mrs. Reed gave a down payment of P60,000.00 and the balance shall be paid in 8 equal monthly instalments without interest beginning in July 1997. Mr Blue realized a gross profit of 25% of acquisition cost. Compute the following:

Selling price Contract price Initial payment for taxable year 1997 Gross profit Gross profit rate for tax purpose Taxable income for 1997 and 1998

27. A parcel of land has the following features: area is 900 sq. m. it is a corner lot; higher than the road, and almost rectangular in shape. If the prevailing price in the area is P10,000.00/sq. m. and subject lot has a corner influence of 15% topographic value of 5% because of elevation and plottage value of 10% because of shape, determine the fair market value of the lot.

28. A 5-storey building was constructed on an 800 sq. m. lot 10 years ago. Floor area is 400 sq. m. per floor. Present reproduction cost of the building is P10,000.00/sq. m. and the land was purchased five years before the building construction at P5,000.00/sq. m. Assuming the depreciation rate of the building is 2% per year while land appreciation is 5% per year, what is the fair market value of the property?

29. A prospective buyer of a house and 300 sq. m. lot consulted his architect who advised him that the present cost to duplicate the house is P3M. The architect also estimated that effective age of the house is 10 years and the economic life for such structure is 50 years. If the buyer is willing to pay P5,000.00/sq. m. for the lot, at how much should he buy the property?

30. After 5 years, the fair market value of the land is P45M. If the appreciation value was 1/8 of the value before adjustment, compute the following:
Appreciation rate Value before adjustment Appreciation value

31. An apartment property has an annual net income of P150,000.00. A buyer can avail of a mortgage loan equivalent to 75% of the capital requirement at 15% annual interest. If the buyer is satisfied with a 10% yield on his equity, at how much should he buy the property? 32. A property has an annual gross income of P1,200.00. In his market study, an investor found that a comparable property with an annual gross income of P1M was recently sold for P6M. On the basis of the gross income multiplier indicated by the comparable property, at how much should he buy the property?

33. MTAM Realty Corp., subdivision developer, acquired five hectare raw land for project development. With the following data and conditions given:
Raw land cost ..P1,000.00 per sq. m. Development cost .P1,000.00 per sq. m. based on saleable area Area of subdivision lot 100 sq. m. Selling price per lot .P3,000.00 per sq. m. MTAM Realty Corp. will give a 5% commission; assume payment of 1.5% creditable withholding tax and documentary stamp tax of 1.5% sale, compute the following:
How many lots are to be sold? How much is the total commission to be paid? How much is the total expenses of the developer?

34. Mr. Poch Pcazo, upon notice, stopped payment of his regular monthly amortization because of the subdivision owner's failure to develop the subdivision. His payments already amounted to P500,000.00, P50,000.00 of which as penalty and P200,000.00 as interest. If Mr. Picazo will demand a refund and the owner will agree with 8% interest, how many will he receive as provided by PD 957?

35. A rectangular lot has an area of 1,000 sq. m. with 20 meters frontage. A 4-storey building was constructed on said lot with a 3-meter setback on all sides at a cost of P25,000.00/sq. m. Compute the following:
The depth of the lot Floor area of the building Total cost of the building

36. A 70-hectare agricultural land devoted to fishpond and with no zonal value was sold by a broker at P120.00/sq. m. as shown in the deed of sale. Assessor's fair market value for the lot per latest tax declaration is only P50.00/sq. m. Compute the following.
Capital gains tax Broker's commission if the rate is 3% based on the net

proceeds of the sale, net of the capital gains tax and documentary stamp tax

37. A deed of sale with mortgage was executed at the total price of P2M of which the sum of P600,000.00 was paid and the balance of P1,400,000.00 was secured by a mortgage on the same property by the buyer. Compute:
Documentary stamp on sale Documentary stamp on mortgage

38. Mr. Deado, died without leaving a will. For purposes of estate taxation, his widow asked the assistance of a tax consultant to determine their tax liability. The certification by a CPA regarding the assets, liabilities and expenses of Mr. and Mrs. Deado revealed the following:

Personal properties (BIR FMV) Condominium unit abroad (BIR FMV) Real estate properties Phils. (BIR FMV) Receipted funeral expenses Receipted hospital and doctors bills Allowable Standard deduction Balance of mortgage of family residence Other financial obligations BIR FMV on residence

P1,000,000.00 3,000,000.00 12,000,000.00 500,000.00 1,000,000.00 1,000,000.00 2,000,000.00 300,000.00 400,000.00

Based on the above data, compute the net estate subject to estate tax.

Based on the above information, compute the following: Basic realty tax before discount for one quarter. Total Special Educational Fund Tax for one year before discount. Total Taxes (basic and SEF) for one year discount is 10%.

39. A certain real estate property was valued and assessed by the assessor's office in the following amount and rate:
Kind of Property Land Building Machineries Market Value 5,000,000 15,000,000 3,000,000 Assessment Level 50% 80% 80% Realty Basic Tax 2% 2% 2% Tax Rate SEF 1% 1% 1%

Based on the above information, compute the following:

Basic realty tax before discount for one quarter. Total Special Educational Fund Tax for one year before discount. Total Taxes (basic and SEF) for one year discount is 10%.

40. Dimaguiba Realty Corporation owns 3 adjoining lots. Lot 2 with an area of 300 sq. m. Lot 3 with an area of 750 sq. m. The price of Lots 2 & 3 is P10,000.00/ sq. m. while corner Lot 1, with an area of 1,200 sq. m. is being sold at P12,000.00/sq. m. Mr. Partido, a businessman, wanted to buy the 3 lots at a discounted price. The corporation agreed to sell the 3 lots to Mr. Partido with 5% discount, 20% down payment payable in 5 years with 20% interest per annum (fixed factor .02649). How much is the total discount? How much is the total contract price of the lots after deducting the discount? Compute the total monthly amortizations.

41. As a broker, when you sell a subdivision lot received 5% brokers commission based on the selling price before VAT, how much would be your broker's net receipt if your commission shall be subject to a 10% creditable withholding tax. The selling price, inclusive of VAT is P1,650,000.00.

42. A 4-hectare property with a 4-different titles and owners is being bought by a developer from a consolidator who has a special power of attorney to sell. The lot is 10,000 sq. m. each. Lot 1 is adjacent to an existing highway, while lots 2, 3, and 4 are without right of way and approximately 200 meters, 400 meters, and 600 meters away from the highway respectively. The four owners cannot agree on how to divide the P5,000,000.00 equitably since their lots are of different distances from the only existing road. To settle the differences, the consolidator hired the services of a competent licensed appraiser to recommend the sharing of the proceeds of sale. The appraiser recommended the depth rule of 4-3-2-1 rule in evaluation of raw land. What is the respective share of each owner using the said rule?

43. Matiyage Corporation bought a three-storey concrete building ten years ago at a cost of P5 Million. The building is being depreciated by the company's accountant on a straight line method using 50 years as its estimated useful life. The board of director's, in their desire to upgrade the financial report of the company, hired the services of a competent licensed appraiser to determine the true fair market value of the building. The appraiser estimated the reproduction cost new of the building at P15 Million and just used or followed the depreciation rate being used by the company in estimating the building accumulated depreciation for 10 years. Based on the above information, compute the following:
The Fair Market Value of the building Unearned Increment

1. Buyer has paid 7 years (84mos. divided by 12 mos.) and is therefore entitled to sixty percent refund. Refund is based on total payment which is down payment plus amortization but exclusive of penalty interest.
Down payment: 200 sq. m. x P 3,000 x 25% Amortization (P737,612.20 P32,000) Basis of refund Percentage of refund Amount of refund =P150,000.00 =P705,612.20 =P855,612.20 = x 60% =P513,367.32

2. Lot area = 240 sq. m. Frontage = 12m Depth = 240 over 12 = 20m Height of wall = 4m Lot Perimeter = 12m + 12m + 20m + 20m = 64m Wall Perimeter = 64 minus 3m gate = 61m Cost = 61m x 4m x P400 =P 97,600.00

3. In the sale of condominium unit, tax base is only the price or unit zonal value whichever is higher. Value per deed of sale is P3,000,000.00 while unit zonal value is P3,375,000.00 (P22,500 x 150 sq. m.). Therefore, tax base is P3,375,000.00. Capital gains tax = P3,375,00.00 x 6% =P202,500.00
Note: Assumption is that the unit sold is not principal residence of seller.

4.

a) Selling Price = P6,300,000 + 30% ( P6,300.00) =P8,190,000.00 b) Selling Price = P8,190,000 = P8,190,000 100% -5% 95%
=P8,621,025.63

Amount to be added to selling price =


P8,621,052.63 P8,190,000.00 = P431,052.63

5.

a) Land Acquisition Cost = 50 HA x 10,000 sq. m. x P700 =P350,000,000.00


b) Development Cost = 500,000 sq. m. x 60% x P1,000 c) Lot Unit Cost = [P350M + 300M] divided by 60% 500,000 sq. m. d) Selling Price = P2,166.67 + P2,166.67 (100%)

=P300,000,000.00
= 2,166.67

=P

4,333.34

6. a) Basis of CGT is whichever is higher between 1) price per deed of sale or 20 Lot zonal value plus improvement value.
Improvement value is whichever is higher between 1) price lot zonal or 2) improvement value per latest of tax declaration.

Price per deed of sale Lot zonal: 800 sq. m. x P3,500

=P3,500,000.00 =P2,800,000.00

Plus Improvement Value: Price-lot zonal: P3,500,000 P2,800,000 = (P 700,000) Improvement value for tax declaration =P1,500,000 =P4,300,000.00

Therefore, basis of CGT is P4,300,000.00 because it is higher than price

6. b) Capital gains tax =P4,300,000.00 x 6% c) Documentary stamp =P4,300,000.00 x 1.5%

=P 258,000.00

=P

64,500.00

7. Total price = 800 sq. m. x 2,000

Down payment = 20% of P1,600,000.00 Balance payable in 5yrs. (60 mos.) Monthly amortization factor Monthly amortization Amortization period Total amortization payment Balance amortized Total interest paid

=P 1,600,000.00 320,000.00 =P1,280,000.00 x .027 =P 34,560.00 x 60 mos. =P2,073,600.00 1,280,000.00 =P 793,600.00

Note: Amortization factor for lot 2 was extrapolated from sale of lot 1 as follows:

Cont. of # 7. . .

Total price: 1,000sq. m. x P2,000.00 =P2,000,000.00 Less 20% Down payment =P 400,000.00 Balance in 5 years =P1,600,000.00 Problem states that Mo. Amortization for lot is P43,200.00. To get amortization factor, formula is monthly amortization divided by balance or P43,200.00 divided by 1,600,000.00 = .027

8. a) Down payment + 1,060 sq. m. x P1,400.00 x 50% =P b) M.O. Amortization = Balance x factor = P742,000 x 0.02705 c) Amortization P20,071.10 P20,071.10 P20,071.10 Total Interest Interest P12,985.00 P12,860.11 P12,734.81 P38,580.80 Principal P7,086.10 P7,210.11 P7,336.29

74,000.00

=P 20,071.10 Balance P742,000.00 P734,913.90 P727,703.79 P720,367.50

Note: Monthly Interest is 21% divided by 12 months - 1.75% 1.75% of previous balance = amount applied to interest Amortization less interest = amount applied to principal Previous Balance amount applied to principal = New Balance

8.d) Balance after three months

=P

720,367.50

e) Down Payment =P 742,000.00 Amortizations: P20,071.10 x 3 months = 60,213.30 Final pre-termination payment = 720,367.50 Total amount paid =P1,522,580.80 Final Cost/sq. m. = P1,522,580.80 1,060 sq. m. =P 1,436.40

9. a) Withholding tax = P950,000.00 x 3% =P 28,500.00 Documentary stamps =P 950,000 x 1.5% =P 14,250.00 b) The sale is not subject to E-VAT because it is a sale by dealer of a residential dwelling where the price does not exceed P1.5million.

10. 3 doors at P10,000.00 x 12 months 4 doors at P12,000.00 x 12 months Annual Gross Income

=P360,000.00(exempt) = 576,000.00(VATABLE) =P936,000.00

Considering that the annual gross receipts P750,000.00, the units with monthly rental of P12,000 are vatable. January output tax =P 12,000.00 x 4 units / 11 January input tax = 30,000.00 x {576,000.00} /11 936,000.00 VAT payable for January =P 4,363.64

=P
=P

1,678.32
2,685.32

11. a) The sale is on instalment basis because the initial payment in the year of sale (1994) did not exceed 25% of the price. Therefore, instalments beginning January 1996 are subject to E-VAT. b) Amortization in 1995: P10,820 x 12 months =P 129,840.00 Amortization in 1996 (Jan. May) P10,820 x 5 mos. / 1.1 =P 59,510.00 Amortization as May 1996 =P 189,350.00

12.

a) January output tax =P 1,100,000 x 1/11


February output tax =P 1,650,000 x 1/11 March output tax =P 880,000 x 1/11

=P 100,000.00
=P 150,000.00 =P 80,000.00

b) January input tax

=P 660,000 x 1/11

=P 60,000.00
=P 70,000.00 =P 50,000.00 =P 40,000.00 =P 80,000.00 =P 30,000.00

February input tax =P 770,000 x 1/11 March input tax c) January E-VAT February E-VAT March E-VAT =P 880,000 x 1/11 =P 100,000 P60,000 =P 150,000 P70,000 =P 80,000 P 50,000

13.a) Withholding tax =P 450,000 x 1.5% b) Withholding tax =P 900,000 x 3%

=P

6,750.00

=P 27,000.00 =P 105,000.00

c) Withholding tax =P2,100,000 x 5%


14. 6 ha. X 10,000 sq. m. 75 ares x 100 sq . m. 800 centares x 1 sq. m.

= 60,000 sq. m. = 3,500 sq. m. = 800 sq. m. 64,300 sq. m.

15. Seller's expense = 6% (CGT) + 5% (comm.) = 11% Selling price = Net to Seller =P5,500,000.00 100% Expenses = P4,895,000 100%-11%

16. Annual Net Income = P300,000 x 12months P400,000 =P3,200,000.00 Rate = Annual Net Income = P3,200,000 Value P 45 M =7.11

17. Selling price = 3 ha. X 10,000 sq. m. x P300 =P9,000,000.00 5% of P1,000,000 = P 50,000 4% of P1,500,000 = P 60,000 3% of P6,500,000 = P195,000 Total Commission= P305,000 Listing broker = 40% of P305,000 =P 122,000.00

Selling broker = 60% of P305,000 =P 183,000.00

18. a) Balance = Mo. Amortization/ Factor = P 54,100.00/ 0.02705 =P2,000,000.00

b) Contract Price = Balance/ 100%-20% = P2,000,000.00/ 80% =P2,500,000.00


c) Down Payment = 20% of P2,500,000.00 =P 500,000.00

19. Principal Payment: P 50,000.00 x 4 quarters =P 200,000.00 Interest: 1st Q: 4% of P600,000.00 =P 24,000.00 2nd Q: 4% of P550,000.00 =P 22,000.00 3rd Q: 4% of P500,000.00 =P 20,000.00 4th Q: 4% of P450,000.00 =P 18,000.00 =P 84,000.00

Amount Paid for the first year

=P 284,000.00

20.a) Acquisition Cost/ sq. m. After 5 years ( P10 + P10) After 10 years ( P20 + P20) After 15 years ( P40 + P40) After 20 years ( P80 + P80) b) Selling Price/sq. m. Unit cost/sq. m. Gross Profit/sq. m.

=P =P =P =P =P =P =P =P

10.00 20.00 40.00 80.00 160.00 200.00 160.00 40.00

21. Selling Price = acquisition cost =P6,300,000.00 =P9,000,000.00 100%-30% 70%

22. Total Price /lot:100sq. m. x P 3,000 Down Payment: 15% of P300,000 Balance Amortization factor Monthly Amortization Amortization for 1st 10 lots P6,475.22 x 10 lots x 4 mos. Amortization for next 10 lots P6,475.22 x 10 lots x 3 mos. Amortization for next 10 lots P6,475.22 x 10 lots x 2 mos. Amortization for last 5 lots P6,475.22 x 10 lots x 1 mos. Amortization as of 5th month

=P 300,000.00 = 45,000.00 =P 225,000.00 x 0.025393 =P 6,475.22


=P 259,008.80 =P 194,256.60 =P 129,504.00 =P 32,376.10 =P 615,145.90

23. Sales Income: 100 units x P450,000.00 =P45,000,000.00 Less: Land: 10,000 sq. m. x P300 =P 3,000,000.00 Dev.: 10,000 sq. m. x P300 =P 3,000,000.00 Hses: 100 units x 60 sq. m. x P3T =P18,000,000.00 =P24,000,000.00 Gross Profit =P21,000,000.00

24. Annual Gross Income: 4 drs. X P6,000.00 x 12 mos. =P 288,000.00 Less: maintenance: P14,000.00 Realty tax: P6,000.00 Annual Net Income Value = Annual Net Income= P267,600.00

=P

20,400.00

=P 267,600.00 =P 2,230,000.00

25.

INTEREST

PRINCIPAL

BALANCE P 100,000.00 84,000.00 (100T-16T)

Payment at the end of 1st yr.P30,000

P14,000.00 (14% of 100T)

P16,000.00 (30T14T)

Payment at the end of 2nd yr.P40,000


Add interest 3rd yr. Add interest 4th yr.

P11,760.00 (14% of P84T)


P 7,806.40 (14% of 55,760)

P28,240.00 (40T11,760)

P 55,760.00 (84T-28,240)

P 63,566.40 (P55,760 + 7,806.40) P 72,465.70 (63,566.40 + 8,899.30)

P 8,899.30 (14% of P63,566.40)

26.

a) Payment to Seller Plus Mortgage Assumed Selling Price b) Selling Price Less Mortgaged Assumed Contract Price c) Down Payment Instalment (July-Dec.) P100T x 6 mos. Total Payment for 1997 d) Selling Price Less Acquisition (P960,000 divided by 125%) Gross Profit e) Gross Profit Divided by Selling Price =P =P 192,000.00 960,000.00

=P =P =P =P =P =P =P =P =P =P =P =P

860,000.00 100,000.00 960,000.00 960,000.00 100,000.00 860,000.00 60,000.00 600,000.00 660,000.00 960,000.00 768,000.00 192,000.00

= 20% =P =P 132,000.00 40,000.00

Taxable Income for 1997: 20% of P660,000.00 Taxable Income for 1998: 20% of P200,000.00

27. Value before adjustment: 900 sq. m. x P10,000 Adjustment: Corner : 15% (+) Topography : 10% (+) Plottage : 5% (+) 30% of 9,000,000.00 Fair Market Value of Land

=P 9,000,000.00

=P 2,700,000.00 =P 11,700,000.00

28. Land Value Value before adjustment:800 sq. m. x P5,500 =P 4,000,000.00 Add Appreciation:15 years x 5% x P4,000.00 =P3,000,000.00 =P 7,000,000.00
Building Value Present Reproduction Cost:5 stys x 400 sq. m. x P 10,000.00 Less Depreciation: 5years x 2% x P20,000,000.00 =P 4,000,000.00 Property Value

=P20,000,000.00
=P16,000,000.00 =P23,000,000.00

29. Land: 300 sq. m. x P5,000.00 =P 1,500,000.00 House: Present Repro Cost =P 3,000,000.00 Depreciation: 10/50/or 20% =P 600,000.00 =P 2,400,000.00 Property Value =P 3,900,000.00

30. a) Appreciation rate

= 1/8 = 0.125

=12.5%

b) Value before adjustment =P 45,000,000.00 100% + 12.5% c) Appreciation Value =P45M 40M

=P40,000,000.00
=P 5,000,000.00

31.Annual Net Income

=P

150,000.00

Capitalization Rate (Band of Investment) % Portion Equity 25% Mortgage 75% Over-all rate Interes 10% 15% Composition Rate 2.5% (2.5% x 10%) 11.25% (75% x 15%) 13.75%

Value = Annual Net Income Rate =P 150,000.00 13.75%

=P 1,090,909.00

32. Gross Income Multiplier = Selling Price of comparable =P 6M Annual Gross Income of comparable 1M

=6

Value = Annual net income of subject x gross income multiplier = P 1,200,000.00 x 6 =P 7,200,000.00 33. a) No. of saleable lots = 5 ha. X 10,000 sq. m. x 70% 100 sq. m. b) Commission Paid = 350 lots x 100 sq. m. x P3T x 5% c) Land Cost = 50,000 sq. m. x P1,000 Development cost = 350 lots x 100 sq m. x P1,000 Commission Withholding tax = 350 lots x 100 sq. m. x P3T x 1.5% Documentary stamps Total Expenses =350 lots =P 5,250,000.00 =P50,000,000.00 =P35,000,000.00 =P 5,250,000.00 =P 1,575,000.00 =P 1,575,000.00 =P93,400,000.00

34. Refund = P500T P50T + 8% =P

486,000.00

( Note: P200T interest is assumed to be part of the total payment of P500,000)

35.a) Lot Depth = Lot Area = 1,000 sq m. Frontage 20m


b) Bldg. Area = (20m6m) x (50m 6m) x 4 sty =2,464 sq. m. c) Bldg. Cost = 2,464 sq. m. x P25,000 =P61,600,000.00

=50 meters

36. a) Price per deed of sale/sq. m.

=P

120.00

Adjusted BIR Value = P50.00 + 150%

=P

125.00

Therefore, tax basis is P125/sq. m. because it is higher than the price. (Note: Per BIR Ruling, in case of agricultural land without zonal value, add 150% to market value per declaration) CGT= 70 ha. X 10,000 sq. m. x P125 x 6% b) Selling Price : 70 ha. X 10,000 sq. m. x P120 Less Capital Gains Tax = P5,250,000 Doc. Stamps = P1,312,500* =P 5,250,000.00 =P84,000,000.00 =P 6,562,500.00

Basis of Commission
Commission rate Amount of Commission

=P77,437,500.00
x 3%

=P 2,323,125.00

* NOTE: (Computed on the basis of P125/sq. m. or 70 ha. X 10,000 sq. m. x P125 x 1.5%)

37.a) Doc. Stamp on Sale: P600,000 x 1.5%

=P

9,000.00

NOTE: If contract is ale with mortgage, basis of doc. Stamp on sale is only the down payment.

b) Doc. Stamp on Mortgage:


First P5,000.00 =P 20.00

{P1,400,000 P5,000} x P10 P5,000

=P2,790.00
=P 2,810.00

37. c) Basic Tax for 1 year net of 10% discount: Land: P12,500 x4 qrts x 90% Bldg: P60,000 x 4 qrts x 90% Mach: P12,000 x 4 qrts x 90% =P 45,000.00 =P216,000.00 =P 43,200.00 =P 304,200.00

SEF Tax for 1 year net of 10% discount


Land: P25,000 x 90% =P 22,500.00 Bldg: P120,000 x 90% =P108,000.00 Mach: P24,000 x 90% =P 21,600.00

=P 152,100.00

Total Taxes Net of 10% discount for 1Yr.

=P 456,300.00

38. Gross Estate: Personal Properties Condo Unit Abroad Real Estate in the Phils.

=P 1,000,000.00 =P 3,000,000.00 =P12,000,000.00 =P16,000,000.00

Deduction: Funeral Expenses 200,000* Hospital/ Doctor's Expense 500,000** Standard Deduction 1,000.000 Mortgage 2,000,000 Other Obligations 300,000 =P 4,000,000.00 P12,000,000.00 Less: One/half conjugal share of wife 600,000 Family home 1,000,000*** =P 7,000,000.00 Net Estate subject to tax =P 5,000,000.00

NOTE: * Maximum deduction for funeral expense is actual expense or 5% of gross estate or P 200,000, whichever is lower. ** Maximum deduction for hospital expense is actual expense or 5% gross sale of P 500,000, whichever is lower. *** Maximum deduction for family home is BIR FMV or P1,000,000.00, whichever is lower.

39. a) Land: P5,000,000 x 50% x 2% 4 quarters Building:P15,000,000 x 80% x 2% 4 quarters Machineries: P3,000,000 x 50% x 2% 4 quarters Total Realty Tax for one quarter

=P =P =P =P

12,500.00 60,000.00 12,000.00 84,500.00

b) Land: P5,000,000 x 50% x 1% Building: P15,000,000 x 80% x 1% Machineries: P3,000,000 x 80% x 1%


Total SEF tax for one year

=P =P =P
=P

25,000.00 120,000.00 24,000.00


169,000.00

40. a) Lot 1: 1,200 sq. m. x P12,000 Lot 2: 300 sq. m. x P10,000 Lot 3: 750 sq. m. x P10,000 Gross Price Discount rate Total Discount

=P14,400,000.00 = 3,000,000.00 = 7,500,000.00 =P24,900,000.00 = x 5% =P 1,245,000.00

b) Price before discount Less total discount Discount Price


c) Discounted Price =P23,655,000.00 20% Down Payment Balance Amortization Factor Total Monthly Amortization

=P24,900,000.00 =P 1,245,000.00 =P23,655,000.00

= 4,731,000.00 =P18,924,000.00 = x 0.02649 =P 501,296.76

41. Selling Price inclusive of VAT Less VAT (P1,650,000/11) Price Net of VAT Commission rate Gross Commission Less 10% withholding tax Net commission 42. Lot 1: Lot 2: Lot 3: Lot 4:

=P 1,650,000.00 = 150,000.00 =P 1,500,000.00 = x 5% =P 75,000.00 =P 7,500.00 =P 67,500.00

40% of P5,000,000.00 30% of P5,000,000.00 20% of P5,000,000.00 10% of P5,000,000.00

=P =P =P =P

2,000,000.00 1,500,000.00 1,000,000.00 500,000.00

43. a) Present Reproduction Cost =P15,000,000.00 Depreciation: 10 yrs. x 2% x P15M =P 3,000,000.00 Fair Market Value =P12,000,000.00 b)Fair market Value Less book value: Acquisition cost =P 5M Depreciation: 10 yrs. x 2% x P5M =P 1M Unearned Increment =P12,000,000.00

=P 4,000,000.00 =P 8,000,000.00