Taxation Straight Problem No. 11 (Goo Hye Sun and Ahn Jae Hyun)

Dahil malapit na rin ang October 2018 CPA Board Exam, may mga ginawa nang problems ang may-akda. Take time to analyze these. Malaking tulong ito para sa inyo, lalo na’t more on situational questions na ang board exam.

This time, we will touch again on another topic related to Estate Taxation. Solve this problem:


Goo Hye Sun is seeking payment from her estranged husband, Ahn Jae Hyun. As the latter filed for divorce, she requested the house as payment for most of expenses she incurred during marriage.

According to Koreaboo:

This house in question is one of the largest suites in an apartment complex in Geumho-dong, Seoul where Ahn Jae Hyun already lived prior to the wedding. It is known to have been purchased in 2016, at 700 million KRW [PHP 16 million] in full cash, by Ahn Jae Hyun.

Assume that the apartment was rented out for one year at PHP 160,000 a month, after they married.

Jae Hyun is now seeking clarifications from you if Goo Hye Sun’s statement holds true.

Use Peso amounts in solving this problem.

Discussion Questions:

  1. Classify the apartment, and apportion amounts according to property regime. Use this table:
Property Regime Conjugal Partnership of Gains Absolute Community of Property
AHN JAE HYUN
Exclusive
·         Apartment
·         Rent Income
GOO HYE SUN
Exclusive
·         Apartment
·         Rent Income
 
Conjugal
·         Apartment
·         Rent Income

Solution: 

Property Regime Conjugal Partnership of Gains Absolute Community of Property
     
AHN JAE HYUN    
Exclusive    
·         Apartment 16,000,000.00
·         Rent Income
     
GOO HYE SUN    
Exclusive    
·         Apartment
·         Rent Income
     
Conjugal    
·         Apartment 16,000,000.00
·         Rent Income 80,000.00 80,000.00
  1. Using the assumption, determine the Real Property Tax to be paid by Ahn Jae Hyun. According also to said article, the fair market value is about 1.5 billion KRW (PHP 34.48 million). Assume also that Assessment Level = 20% and that 1% of total assessed value is levied as RPT.

Computation: PHP 34.48 million x 20% x 1% = PHP 68,960.00

  1. Compute for the output tax to be paid by Ahn Jae Hyun on rental of his house.

None. Even if monthly rent exceeds PHP 15,000.00 monthly rental limit required for VAT exemption, taken yearly it does not exceed PHP 3 million annual threshold required for VAT imposition. Computation: PHP 160,000.00/month x 12 months = PHP 1,920,000.00.

Solutions are indicated in white text. Only select it after answering these questions.


Taxation problem created by: TweetNewscaster. Featured Image Credit from Koreaboo.

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