TAXATION - DEDUCTIONS

Strictly against the taxpayer

In cases of deduction and exemption on income tax return doubts shall be resolved

expenses deductible from gross income

Representation expenses designed to promote business

Expenses paid to an advertising firm in order to create a favorable image for the business

Premiums on life insurance covering the life of an employee if the beneficiary is his heirs

They are all?

Asset account

Interest paid or incurred in the acquisition of fixed assets may be capitalized to the

individual

An (blank) on the cash basis of accounting shall deduct interest paid in advance in the year that the principal is paid

deductible

Loss on casualty

net operating loss

A (blank) is the excess of allowable deductions over the gross income from business for a taxable year

casualty

the measure of loss is the book value of the asset reduced by any form of indemnity, it is a total loss due to

Bad debt

it is an accounting expense when a provision is made for it and a deduction from the gross income when the account is written off

depreciation expense

it can be a deduction for both tangible and intangible property with limited useful life

deducted from gross income

Contributions or donations given directly to individuals cannot be

research and development costs

When related to the acquisition and/or improvement of land and building, must be capitalized

If not related to land and building, may be treated as an outright deduction and as a deferred expense which may be amortized

corporation

they cannot deduct a loss arising from a sale between the corporation and the controlling individual stockholders and controlling parent corporation.

“related taxpayers”

Between members of the family, the grantor and a fiduciary of any trust and a fiduciary of a trust and a beneficiary of such trust, they apply to the phrase?

deductible taxes

Community tax

Documentary stamp tax

Excise tax

non-deductible taxes

Special assessment

VAT

Stock transaction tax

deduction for bad debt

a (blank) is not available when a provision for it is made and is available only when a write off is made

surety

There is no deduction for bad debt when there is a (blank) for the debtor against whom collection may be enforced

depletion

it is allowed on wasting assets only, for foreign corporations engaged in doing business in the Philippines is allowed only if the mine is located in the Philippines and it is separate from deduction for depreciation of building in the mine site. It is a deduction for

deductible from gross income

Salaries and wages of employees

Entertainment, amusement and recreation expenses

Rental expenses

this items are?

deductible

Must have been paid or incurred within the taxable year, Must be in connection with the taxpayer’s profession, trade or business and Deductible only by the person/s upon whom the tax is imposed by law

these are the requisites for taxes to be

Not more than ½% of net sales of goods

allowable entertainment expense

Be carried over as a deduction from gross income for the next 3 consecutive taxable years

The net operating loss of the business or enterprise for any taxable immediately preceding the current taxable year, which had not been previously offset as deduction from gross income shall

net operating loss carry-over (NOLCO)

it is available to a domestic corporation, registered general partnership in business in the Philippines and to an individual in business in the Philippines

10% of taxable income before and in case of individuals

To be allowed as a valid deduction, charitable and other contribution must not exceed

Not less than 60 months beginning with the month in which the taxpayer first realizes benefits from such expenditure

Research and development expenses treated as a deferred expense shall be allowed as deduction ratably distributed over a period of

Optional standard deduction

Cannot be used as a deduction from compensation income

OSD

Taxable estates and trust

Resident foreign corporation

Domestic corporations

they are allowed to claim the (blank) in lieu of the itemized deductions

Optional Standard Deduction

individual taxpayers using the accrual basis of accounting, it is based on 40% of gross sales

using the cash basis of accounting, it is based on 40% of gross receipts

using the other basis of accounting such as percentage of completion method, it is based on 40% of gross receipts of sales, as the case may be

these are the basis in computing?

nonresident foreign corporations

they are not allowed to claim the net operating loss carryover (NOLCO)

charitable contributions

it is deductible from the gross income even if not business related

not deductible in full

donations made for the use of the government of the philippines or any of its agencies or political subdivision exclusively for public purpose, this is charitable and other contributions which is

10 years

pension contribution for past service cost is amortized over a period of