An individual, who is a real estate dealer, sold a residential lot in Quezon City at a gain of P100,000.00 (selling price of P900,000.00 and cost is P800,00.00). The sale is subject to income tax as follows: a) 6% capital gains tax on the gain;b) 6% capital gains tax on the gross selling price of fair market value, whichever is higher;c) Ordinary income tax at the graduated rates of net taxable income;d) 8 % income tax on net taxable income.

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Answered: An individual, who is a real estate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An individual, who is a real estate dealer, sold a residential lot in Quezon City at a gain of P100,000.00 (selling price of P900,000.00 and cost is P800,00.00). The sale is subject to income tax as follows:

a) 6% capital gains tax on the gain;
b) 6% capital gains tax on the gross selling price of fair market value, whichever is higher;
c) Ordinary income tax at the graduated rates of net taxable income;
d) 8 % income tax on net taxable income.

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