MANAGEMENT

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BUISENESS MANAGEMENT

TAXES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the Following is INCORRECT? Statement I:Under the TRAIN law, regardless of whether the donee is a relative or a stranger to the donor, the donor’s tax for each calendar year is at a uniform rateof 6%. Statement II:The 6% imposed on the gross gift and is computed on a cumulative basis over a period of one (1) calendar year.
A
Statement I only
B
Statement II only
C
Statements I and II
D
Neither statement I nor II
Explanation: 

Detailed explanation-1: -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.

Detailed explanation-2: -It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.

Detailed explanation-3: -Donations mortis causa or those which are to take effect upon the death of the donor and therefore partake of the nature of testamentary dispositions are subject to estate tax.

Detailed explanation-4: -A transfer is gratuitous or without consideration and accordingly qualifies as a donation, if no economic benefit measurable in money or money’s worth flowed to the transferor from the transferee.

There is 1 question to complete.
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