Which of the following is INCORRECT about the donors tax? Statement I:Lineal relatives are still considered relatives regardless of the number of generations between the donor and the donee. Statement II:Relatives by affinity or those relatives by marriage are strangers.

TAXES

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which of the following is INCORRECT about the donor’s tax? Statement I:Lineal relatives are still considered relatives regardless of the number of generations between the donor and the donee. Statement II:Relatives by affinity or those relatives by marriage are strangers.

A	Statement I only
B	Statement II only
C	Statements I and II
D	Neither statement I nor II

Explanation:

Detailed explanation-1: -1. What donations are tax exempt? Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government.

Detailed explanation-2: -Donation inter vivos is subject to donor’s tax while donation mortis causa is subject to estate tax.

Detailed explanation-3: -T-Donor’s tax shall apply, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible, even if the transfer is merely in trust.

Detailed explanation-4: -A donation can be both part of the gross gift of the donor and a taxable income to the donee. A donation may be exempt from donor’s tax but not necessarily a deduction from the donor’s gross income. Reciprocity clause is applied to non-resident alien donating real property.

There is 1 question to complete.

MANAGEMENT

BUISENESS MANAGEMENT

TAXES