Questions 24-35 30. One of the following is not correct for deductibility of losses from gross incomeA. Must arise from fire, storm or other casualty, robbery, theft or embezzlement.B. Must not be compensated by insurance or other form of indemnity.c. A declaration of loss by casualty should be filed with the Bureau of Internal Revenue.D. Must have been claimed as deduction in the estate return of the taxpayer.31. Which of the following statements is not correct?A. The Optional Standard Deduction is an amount equal to forty (40%) of the gross income from business orpractice of profession of the taxpayer.B. The Optional Standard Deduction is not available against compensation income arising out of an employer-employee relationship.c. The election of Optional Standard Deduction is irrevocable for the taxable year for which the choice is made.D. Unless the taxpayer signifies in his return his intention to avail of the OSD, he shall be considered as havingavailed of the itemized deductions.32. The net operating loss, which had not been previously offset as deduction from gross income shall be carriedover as deduction from gross income for the nextA. 2 consecutive taxable years immediately following such loss.B. 3 consecutive taxable years immediately following such loss.C. 4 consecutive taxable years immediately following such loss.D. Taxable year immediately following such loss.Use the following data for the next two (2) questions:A taxpayer engaged in business incurred a partial loss of property as follows:Asset 1Asset 2Book value of the asset at the asset at the time of lossCost to restore the property back to its normal operating conditionInsurance recoverySalvageP200,000120,00050,000P200,000300,000NoneNone40,00033. The deductible loss for asset 1 isA. P120,000B. P70,000C. P30,000D. P80,00034. The deductible loss for asset 2 isA.P300,000B. P150,000C. P160,000D. P240,000 25. Any amount subsequently received on account of a bad debt previously charged off and allowed as a deductionfrom gross income in prior years must be included in gross income in the taxable year in which received. ThisisA. Severance testB. Life-blood theoryC. Destination of income testD. Equitable doctrine of tax benefit26. A took out a life insurance policy of P1,000,000 naming his wife as beneficiary. The policy provides that theinsurance company will pay A and his beneficiary the amount of P1,000,000 after the 25th year of the policy,should he die before this date. The premiums paid on the policy is P700,000. If A outlived the policy andreceived the proceeds of P1,000,000, such proceeds will be:A. Taxable in fullB. Exempt from income taxC. Partly taxable, partly exemptD. Subject to final tax27. Using the preceding number, if A dies and his beneficiary received the proceeds of P1,000,000, such proceedswill beA. Taxable in fullB. Partly taxable, partly exemptC. Exempt from income taxD. Subject to final tax28. May consider capital expenditure as revenue expendituresA. Resident citizenB. Domestic oorporationC. Private educational institutionsD. Resident alien29. A building was partially destroyed by fire in 2017. The building had a book value of P5,000,000. The insurancecompany was willing to pay P4,000,000, which was refused by the owner. Finally, the claim was settled in 2018for P4,600,000. The proceeds will beA. Exempt from income taxB. Part of taxable incomeC. Subject to final taxD. Partly exempt, partly taxable

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