Gross Income

John V. Balanquit

Objectives

After the presentation, students should be able to:• Describe and distinguish the different

sources of gross income• Illustrate how each item of gross income

are treated in terms of taxation

Items of Gross Income

• Compensation– Those received by a person from another entity

by virtue of an employee-employer relationship

Items of Gross Income

• Business Income– Those received by a person from trade either

through the sale of goods or services

Items of Gross Income

• Gains from dealings in Properties– Those received by a person from the sale of

capital asset such as real properties or shares of stocks.

Items of Gross Income

• Interests– Those received by a person from deposits,

loans and other indebtedness.

Items of Gross Income

• Rent– Those received by a person from other entities

who borrows or uses the former’s property or right.

Items of Gross Income

• Royalties– Those received by a person from leasing

intangible assets such as copyrights, patents, and trademarks.

Items of Gross Income

• Dividends– Those received by a person from a corporation

as his share in income by virtue of him being a shareholder.

Items of Gross Income

• Annuities– Those received by a person from insurance or

other similar contract.

Items of Gross Income

• Prizes and Winnings– Those received by a person from contests

whether commercial or non-commercial.

Items of Gross Income

• Pensions– Those received by a person from a retirement

contract.

Items of Gross Income

• Others– Those received by a person from:• Gambling and other illegal activities• Damages claimed• Debt forgiven• Recovered bad debts• Taxes refunded• Informer’s Reward

Exclusions from Gross Income

• Life Insurance• Gifts, Bequests, and Devises• Compensation for Injuries• Income exempt under treaty• Retirement Benefits• Other Miscellaneous Income

End of Lecture.

Thank You!