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Donors Tax_Session 3

Service Learning

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1K views

Donors Tax_Session 3

Service Learning

Uploaded by

dianarosesarsalejo19
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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DONOR’S TAX

PROBLEM SOLVING
ACTIVITY
Objectives
To enhance problem-solving skills by applying
Donor's Tax principles to real-world scenarios
and computations.

To understand strategies for minimizing


Donor’s Tax liabilities through practical
examples and legal provisions.

Diana
Ms. Hiraya Manawari, single has made the following donations:

February 14 - To her brother Alas, P100,000

March 1 - To Dayang, her sister, P350,000

September 5 - To her boyfriend, R-Ji, a brand- new car worth, P800,00

November 5 - To her father, Lakan, a house and lot, P4,800,000

December 25 - To the Philippine Inventors Commission P50,000.


1. How much is the tax due on the February 14 donation?
2. How much is the tax due on the March 1 donation?
3. In the immediately preceding question, if the return is
filed and the tax is paid May 1 , how much is the total
amount payable?
1. How much is the tax due on the February 14 donation?
Answer: 6,000

Solution:
Donation to the brother P100,000
Donors Rate 6%

Tax Due P 6,000


2. How much is the tax due on the March 1 donation?

Answer: P9,000

Solution:
Donation to her sister P 350,000
Exempt (250,000)
Total P150,00
Rate 6%
Tax due P9,000
3. In the immediately preceding question, if the return is filed and the tax is
paid May 1 , how much is the total amount payable?

Answer:

Solution:
Tax due P 9,000
Add: Surcharge
Late Filing and payment (9,000x25%) 2,250
Interest (9,000x12%x31/365) 92

Amount Payable P 11,342


Mr. Aki Ragasa a resident citizen, single has made the following donations:

2020:
January 6 - To his brother Ala - 5,000,000
February 14 - To Aya, his girlfriend in Thailand, a box of jewelry - 400,000
May 20- To his best friend Wyat, a car- 1,500,000
December 19 - To his sister Diana, a computer set up - 500,000

2022
March 8- To his father- 400,000
April 1 - To his neice, a cellphone- 15,000
June 16 - To Gango Elementary School, a cheque - 900,000
July 6 - To UGOD Home for the Aged - 9,00,000

Question:
1. How much is the gross gift for 2020?
2. How much is the gross gift for 2022
2020
To his brother Ala 5,000,000
To Aya, his girlfriend in Thailand, a box of jewelry - 400,000
To his best friend Wyat, a car 1,500,
To his sister Diana, a computer set up 500,000

Total Gross Gift 5,901,500

2022
To his father 400,000
To his neice, a cellphone 15,000
To Gango Elementary School, a cheque 900,000
To UGOD Home for the Aged 900,000

Total Gross Gift 2,215,000


PROBLEM 1:

A resident citizen donor made the following donations:


March 30, 2023: P1,000,000 to a friend as wedding gift.
May 1, 2023: P2,000,000 to his brother in law.

Required: Determine the donor’s tax payable on:


1. March 30, 2023
2. May 1, 2023
SOLUTION: PROBLEM 1

A resident citizen donor made the following donations:


March 30, 2023: P1,000,000 to a friend as wedding gift.
May 1, 2023: P2,000,000 to his brother in law.

a. March 30, 2023


Gross Gift - March 30, 2023 1,000,000
Exempt 250,000
Donor’s tax payable 750,000
SOLUTION: PROBLEM 1
A resident citizen donor made the following donations:
March 30, 2023: P1,000,000 to a friend as wedding gift.
May 1, 2023: P2,000,000 to his brother in law.

b. May 1, 2023
Gross Gift - May 1, 2023 2,000,000
Prior Gift 1,000,000
Total Gift 3,000,000
Exempt 250,000
Taxable net gift 2,750,000
Tax rate 6%
Donor’s tax payable 165,000
PROBLEM 2
A resident citizen made the following donations:
On March 1, P200,000 to his son, on account of marriage celebrated on January 1,
2023.
On May 30, a parcel of land worth P500,000 to his brother, subject to the condition
that the donee would assume the mortgage indebtedness in the amount of
P100,000.
On June 30, P300,000 to an ailing friend.
On July 31, P200,000 cash to Bantay Bata
On September 30, a house and lot worth P3,000,000 to his daughter and son in law,
on account of their scheduled marriage on December 25, 2023. A mortgage of
P600,000 will be assumed by the donees.

Required: Determine the tax payable on:


1. March 1
2. May 30
3. June 30
4. July 31
SOLUTION: PROBLEM 2
a. Tax payable on March 1
Gross Gift - March 1 200,000
Exempt 250,000
Donor’s tax payable 0

b. Tax payable on May 30


Gross Gift - May 30 500,000
Less: Mortgage 100,000
Prior Gift - March 11 200,000
Total Gift 600,000
Less: Tax exempt 250,000
Taxable net gift 350,000
Tax rate 6%
Donor’s tax payable 21,000
SOLUTION: PROBLEM 2
c. Tax payable on June 30
Gross Gift - June 30 300,000
Prior Gift 600,000
Total Gift 900,000
Less: Tax exempt 250,000
Taxable Gift - June 30 650,000
Tax rate 6%
Donor’s tax due 39,000
Less: Tax paid - May 30 21,000
Donor’s tax payable 18,000

d. Tax payable on July 31


Exempt
SOLUTION: PROBLEM 2
e. Tax payable on September 30
Gross Gift - September 30 3,000,000
Less: Mortgage assumed 600,000
Prior Gift 900,000
Total Gift 3,300,000
Less: Tax exempt 250,000
Taxable Gift - July 31 3,050,000
Tax rate 6%
Donor’s tax due 183,000
Less: Tax paid - June 30 39,000
Donor’s tax payable 114,000
Problem 3
Mr. and Mrs. Smith made the following donations during 2023:

May 25:
Vacation house and lot in Cebu worth php40,000,000 to their
grandson Hayden. The property was mortgaged for 20,000,000 (unpaid
at the time of donation), 1/2 was assumed by Hayden.

June 30:
Jewelry (capital property of Mr. Smith ) worth 5,000,000 to Yuri. They
agreed that Yuri will be the one to pay the donor’s tax thereon.

Required:
1.Donor’s tax due of Mrs. Smith on May 25
2. Donor’s Tax due of Mr. Smith on May June 30
SOLUTION: PROBLEM 3
Required 1:

May 25 Mr. Mrs.


Gross Gifts =P40M/2 P20,000,000 P20,000,000
Mortgage assumed by the donee(P20M/2)/2 (5,000,000) (5,000,000)

Net gift P15,000,000 P15,000,000


Less: Exempt gifts (250,000) (250,000)

Taxable Net gifts P14,750,000 P14,750,000


x Donor’s tax rate 6% 6%

Donor’s Tax Due P885,000 P885,000


SOLUTION: PROBLEM 3
Required 2:
Mr.
Gross gifts-June P5,000,000
Add: Prior net gift - May 25 15,000,000

Total Net gift P20,000,000


Less: Exempt gifts (250,000)

Taxable Net Gifts P19,750,000


x Donor’s Tax Rate 6%

Donor’s Tax Due P1,185,000


Less: Donor’s Tax Paid- May 25 (885,000)

Donor’s Tax Payable- June 30 P300,000


Activity Problem:
On December 1, 2023, Mr. and Mrs. Yakuza wishes to
donate P1,000,000 to their niece, Zia. Nonetheless, they
were surprise to know that the corresponding donor’s
tax was significant for them.

What strategies can they employ to donate the


P1,000,000 while minimizing or avoiding the donor's
tax?
Solution:
Split the Gift as follows:
DATE of DONOR’s
Donation DONOR AMOUNT TAX DUE
Dec.25, 2023 Husband P250,000 Exempt
Dec.25, 2023 Wife 250,000 Exempt

Jan.1, 2024 Husband P250,000 Exempt


Jan.1, 2024 Wife 250,000 Exempt

TOTAL P1,000,000 Exempt


Filing Activity:
THANK YOU VERY
MUCH!

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