Taxpayer enjoyed its last year of its income tax holiday in 2020. For that year, it reported however a net loss of P500,000. For the taxable year 2021, it reported a net income of P300,000. How much NOLCO must have been used by the taxpayer in 2021? * a. Zero b. 100,000 c. 300,000 d. 500,000

Taxpayer enjoyed its last year of its income tax holiday in 2020. For that year, it reported however a net loss of P500,000. For the taxable year 2021, it reported a net income of P300,000. How much NOLCO must have been used by the taxpayer in 2021? * a. Zero b. 100,000 c. 300,000 d. 500,000

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Taxpayer enjoyed its last year of its
income tax holiday in 2020. For that
year, it reported however a net loss
of P500,000. For the taxable year
2021, it reported a net income of
P300,000. How much NOLCO must
have been used by the taxpayer in
2021? *
a. Zero
b. 100,000
c. 300,000
d. 500,000

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