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COMPREHENSIVE PROBLEM:

In preparing the 2021 Annual Income Tax Return of Nicanor, the following information were culled from his accounting records:

Gross sales Php 2,500,000

Cost of sales Php 1,000,000

Salaries and wages Php 100,000

Rent Expense Php 100,000

Depreciation Php 100,000

Utilities Expense Php 100,000

Repairs and Maintenance Php 100,000

Other income:

Rental income Php 1,000,000

Interest income from bank deposits in Bank of the Pelepens Php 100,000

Dividends from ABC Corp., a DC Php 100,000

Cash Prizes Php 100,000

The duly filed 1^st quarterly income tax return indicated that Nicanor opted 8% taxation.

In addition, he provided you the following information on other assets which he disposed of during the year:

Real property classified as capital asset:

Consideration indicated in the Deed of Absolute Sale (DOAS) Php 20 Million

Zonal value of lot Php 10 Million

Assessors fair value of lot Php 5 Million

Assessors fair value of house Php 5 Million

Appraisers value Php 25 Million

Shares of stocks not listed in stock exchange:

Selling price of shares of stocks Php 2,000,000

Price of shares of stocks when he purchased the same last year Php 1,000,000

Audited Financial Statements of the company disclosed the following:

Balance Sheet: Asset - Php 10 Million

Liability Php 7 Million

Stockholders Equity Php 3 Million

Income Statement: Revenue Php 5 Million

Cost and Expense Php 3 Million

Net Income Php 2 Million

Additional information: Outstanding shares of stocks is 10,000 and cost to transfer shares to new buyer is Php 100,000.

How much is the capital gains tax to be paid on the sale of unlisted shares of stocks?

Group of answer choices

b. Php 300,000

a. Php 150,000

c. Php 120,000

d. Php 135,000

Answer & Explanation Solved by verified expert

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