Taxation Chapter 4 - FM2F

Examples of passive income, except for:

• Interest income from banks

• Dividends from domestic corporations

• Royalties

• Compensation income

The __________ starts from January 1 and ends December 31.

• Fiscal year

• Calendar year

• Accounting period

• Accounting reporting

The __________ is any combination of accrual basis, cash basis and or other methods of accounting.

• Accrual basis

• Cash basis

• Hybrid basis

• Installment method

It is an amount paid in lieu of criminal prosecution over a tax violation.

• Compromise interest

• Compromise penalty

• Compromise fees

• Compromise violation

Examples of active income, except for:

• Compensation income

• Interest income

• Business income

• Professional income

It is imposed on the gain realized on the sale, exchange and other dispositions of certain capital assets.

• Final taxation

• Regular income taxation

• Capital gains taxation

• Transfer taxation

It is the length of time over which income is measured and reported.

• Calendar year

• Accounting method

• Accounting period

• Fiscal year

The accounting period covers the date of the start of the business until the designated year-end of the business.

• Dissolution of business

• Newly commenced business

• Change of accounting period by corporate taxpayers

• Death of the taxpayer

Income is recognized when received and expense is recognized when paid.

• Accrual basis

• Cash basis

Income is recognized when earned regardless of when received.

• Accrual basis

• Cash basis