• Bulacan State University, Malolos

• TAX 101

Assignment:

1. A & Co. is a general professional partnership, with Partners A and B sharing equally in the

partnership net income of net loss. In a calendar year, the partnership and the partners had the

following income tax data:

A & Co.

Gross Income ₱ 1,000,000

Expenses of Operations 400,000

Partner A:

Gross Income ₱ 600,000

Expenses related to gross income 300,000

Partner B:

Gross Income ₱ 700,000

Expenses related to gross income 450,000

If the partnership availed of the Optional Standard Deduction, compute for:

Income tax of A & Co.

The partnership is a general professional partnership. As such, it is not subject to income tax.

Taxable income of Partner A for the year.

Gross Income ₱ 1,000,000

Less: Expenses (40% OSD) (400,000)

Net Income ₱ 600,000

Distributive share of Partner A (₱ 600,000 x 50%) ₱ 300,000

Distributive share of Partner A ₱ 300,000

Gross Income ₱ 600,000

Less: Expenses (40% OSD) 240,000

Net taxable income ₱ 360,000

Total taxable income ₱ 660,000

Taxable income of Partner B for the year.

Gross Income ₱ 1,000,000

Less: Expenses (40% OSD) (400,000)

Net Income ₱ 600,000

Distributive share of Partner B (₱ 600,000 x 50%) ₱ 300,000