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BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS)SUGGESTED ANSWERS

  Ch!t"# $6: DOCU%ENTARY STA% TAXES

C'ATER $6

DOCU%ENTARY STA% TAXES

Problem 16 – 1

1. True

2. True

3. False – the transaction.

4. False – to be taxed against the party who is not exempt.

5. True

6. False – 10 days from the close of the month

7. True8. True

9. True

10.True

Problem 16 – 2 B

Documentary stamp tax to be paid (P1,000/P200) x P10 x P2 P 100

Problem 16 – 3 A

Documentary stamp tax to be paid ($5,000 x P40/P200) x P0.30 P 300

Problem 16 – 4 B

DST on first P5,000

DST on excess of the first P5,000 = (P395,000/P5,000) x P10 Total documentary stamp tax

P 20

 790P810

Problem 16 – 5 C

Documentary stamp tax (P800,000/P1,000) x P15 P12,000

Problem 16 – 6 D

DST on first P2,000

DST on excess of the first P2,000 = (P142,000/P1,000) x P1

 Total

Multiply by

 Total documentary stamp tax

P 3

 142

P145

  2

P290

Problem 16 – 7

Face value of the bonds

Divide by

Multiply by documentary stamp tax

Documentary stamp tax

P50,000

  200

250

P 1.50

P 375

Problem 16 – 8

Par value of the stock (P100 x 1,000 shares)

Divide by

P100,000

  200

500

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Multiply by documentary stamp tax

Documentary stamp tax

P 2.00

P 1,000

Problem 16 – 9

Par value (P100 x 100 shares)Divide by value

Multiply by documentary stamp tax

Documentary stamp tax

P10,000  200

50

P 1.50

P 75

Problem 16 – 10

Face value of document

Divide by

Multiply by documentary stamp tax rate

Documentary stamp tax

P100,000

  200

500

P 0.30

P 150

Problem 16 – 11

Face value of document (P50 x $5,000)Divide by

Multiply by documentary stamp tax rate

Documentary stamp tax

P250,000  200

1,250

P 0.30

P 375

Problem 16 – 12

Insurance policy

Divide by

Multiply by documentary stamp tax rate

Documentary stamp tax

P1,000,000

  200

5,000

P 0.50

P 2,500

Problem 16 – 13

 Annual insurance premium

Divide by

Multiply by documentary stamp tax rate

Documentary stamp tax

P 5,000

  4

1,250

P 0.50

P 625

Problem 16 – 14

 The documentary stamp tax on the affidavit of loss is P15.00.

Problem 16 – 15

 The documentary stamp tax would be P10.00.

Problem 16 – 16

Sales price

Less: Unpaid mortgage balance

Balance

Less: Amount not subject to DST

Balance

Divide by

Multiply by

P1,000,000

  200,000

P 800,000

  1,000

P 799,000

P 1,000

799

P 15

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Documentary stamp tax

 Add: DST for the first P1,000

 Total documentary stamp tax

P 11,985

  15

P 12,000

Problem 16 – 17

Documentary stamp (P1,000,000/ P1,000) x 15

Surcharge (P15,000 x 25%)

Interest (from June 25 to July 25) (P15,000 x 20%)

 Total payable

P15,000

3,750

  250

P19,000

Problem 16 – 18

a. P – 0 –

 b. P – 0 –

See page 503 of the textbook. Deeds of property donated to the government are exempt from

documentary stamp tax.