In the exercise of eminent domainpower, the Philippine Governmentexpropriated the private property ofMr. Juan for public use with justcompensation. Argument 1: TheCollector of Internal Revenuecontends that the said expropriation issale, and therefore the incomederived therefrom is subject toincome tax. Argument 2: Mr. Juanargued that the expropriation of hisproperty cannot be considered as salebecause the transfer of such propertywas made by force, there beingpractically no meeting of mindsbetween the parties. Issue: Whetheror not income from expropriationshould be deemed as income fromsale for income tax purposes.The Collector of Internal Revenue is correctbecause there is income derived from thetransfer of property.Mt. T is correct because the transfer wasmade by force.Both arguments are correct.! O Both arguments are not correct.

Here the scenario related with the details of expropriation of property which was taken over by the…

Answered: In the exercise of eminent domain…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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In the exercise of eminent domain power, the Philippine Government expropriated the private property of Mr. Juan for public use with just compensation. Argument 1: The Collector of Internal Revenue