University Of the City of Manila (Pamantasan ng Lungsod ng Maynila)

• BS 101

• 1. There is no taxable income until such income is recognized. Taxable income is recognized when the (BEQ) a. Taxpayers fails to include the income in his income tax return. b. Income has been actually received in money or its equivalent. c. Income has been received, either actually or constructively. d. Transaction that is the source of income is consummated. 2. In 2022, Mr. Chris sent his sister Nora $ 1,000 via a telegraphic transfer through the BDO. The bank’s remittance clerk made a mistake and credited Helen with $1,0000 which she properly withdrew. The bank demanded the return of the mistakenly credited excess, but Helen refused. The BIR entered the picture and investigated Helen. Would the BIR be correct if it determines that Helen earned taxable income under these facts? (BEQ) a. No, she had no income because she had no right to the mistakenly credited funds. b. Yes, income is a taxable income regardless of the source. c. No, it was not her fault that the funds in excess of $1,000 were credited to her. d. No, the funds in excess of $1,000 were in effect donated to her