Deductions from Gross Income Classify the items for deduction in the following scenarios. 1. On January 1, 2016, Mr. V leased his vacant lot for 12 years to Mr. J at an annual rate of P2,400,000. It was also agreed that Mr. J will pay the following: • P4,800,000 representing rental payment for year 2016 and 2017; • Security deposit of P2,400,000; and Annual real property tax of P30,000. The lease contract states that the lessee will construct a 5-storey building for parking purposes at a cost of P9,500,000. The ownership of the building shall belong to the lessor upon the expiration or termination of the lease contract. The building was completed on July 1, 2018 with an estimated useful life of 15 years. Compute the amount of deduction that Mr. J can claim in relation to: a. 2016 lease; b. 2017 lease; c. 2018 lease; and d. 2019 lease.
Deductions from Gross Income Classify the items for deduction in the following scenarios. 1. On January 1, 2016, Mr. V leased his vacant lot for 12 years to Mr. J at an annual rate of P2,400,000. It was also agreed that Mr. J will pay the following: • P4,800,000 representing rental payment for year 2016 and 2017; • Security deposit of P2,400,000; and Annual real property tax of P30,000. The lease contract states that the lessee will construct a 5-storey building for parking purposes at a cost of P9,500,000. The ownership of the building shall belong to the lessor upon the expiration or termination of the lease contract. The building was completed on July 1, 2018 with an estimated useful life of 15 years. Compute the amount of deduction that Mr. J can claim in relation to: a. 2016 lease; b. 2017 lease; c. 2018 lease; and d. 2019 lease.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 11P
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