TAXATION - GROSS INCOME

Gross Income

it is defined as any gain derived from labor, capital, and sale of asset

Passive income

it is subject to final tax not form part of the gross income for purpose of computing the normal income tax liability of individuals and corporations

income tax

all income exempted from law an treaty are exempted from

taxable income

as a rule the cash dividend, and property dividend are part of the

basic income tax

interest income earned and derived from the normal course of trade and business, notes receivable, and bank deposit abroad are subject to

part of taxable income

part of insurance taken by a corporation on the life of an executive to indemnify it against loss in case of his death is

gross income

the proceeds of life insurance do not form part of

Taxable

if the involuntary action is part of a nontaxable then the voluntary action is

to a payment of compensation income

if an individual performs services for a creditor who, in consideration thereof, cancels the debt, the cancellation of indebtedness may amount

taxable

incomes from illegal activities are always

5 years or more

Gain realized from the sale or exchange or retirement of bonds, debenture or other certificate of indebtedness is excluded from gross income if with a maturity of

percentage tax

if refunded, this is taxable

from long term contracts

this income must be reported only on the percentage of completion method of accounting

gross income

13th month pay and other benefits regardless of the amount (up to 90k) are not excluded from

excess from 13th pay and other benefits paid or accrued during the year over 90k

this income received by officials and employees in the public sector are not subject to income tax on compensation

excluded from gross income

the proceeds of life insurance policies paid to the heirs or beneficiaries upon the death of the insured, whether in a single sum or otherwise, but if such amounts are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income

excluded from gross income

the amount received by the insured, as a return of premiums paid by him under life insurance, endowment, or annuity contracts, either during the term or at maturity of the term mentioned in the contract or upon surrender of the contract

excluded from gross income

the value of property acquired by gift, bequest, devise, or descent

included from gross income

income from such property, as well as gift, bequest, devise or descent of income from any property in cases of transfers of divided interest, shall be

excluded from gross income

amounts received, through Accident or Health Insurance or under Workmen's Compensation Acts, as compensation for personal injuries or sickness, plus the amounts of any damages received, whether by suit or agreement, on account of such injuries or sickness

excluded from gross income

Income exempt under Treaty

excluded from gross income

Retirement benefits, pensions, gratuities

excluded from gross income

Prizes and awards in sports competition - all prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and sanctioned by their national sports associations

excluded from gross income

Income derived by foreign government and government or its political subdivisions (local)

excluded from gross income

Prizes and awards - prizes, awards made primarily in recognition fo religious, charitable, scientific, educational, artistic, literary or civic achievement

excluded from gross income

Gains from the sale of bonds,debentures or other certificate of indebtedness with a maturity of more than 5 years and shares in mutual fund

income tax and withholding tax on compensation

Benefits received by government officials and employees are also not subject to

lessor

what do you call the landlord in the used of property

lessee

what do you call the tenant in the used of property

100% fair market value

if it is outright method (lump sum) the percentage and value will be use is

straight line method

if it is spread-out method (over long term) used

Inclusion on Gross income

return ON capital

excluded from gross income

return OF capital

excluded from gross income - final withholding tax

Interest income within bank deposit is

Inclusion on Gross income

interest income abroad bank deposit and notes receivable

excluded from gross income

royalties within 10% or 20% FWT

included in gross income

royalties abroad

included in gross income

annuities - written contract, typically between you and a life insurance company, in which the insurance company makes a series of regularly spaced payments to you in return for a premium or premiums you have paid.

included in gross income

pension (retirement pay)