Taxation, 2013 Bar — Question MC-VI

MULTIPLE CHOICE

In 2010, Mr. Platon sent his sister Helen $1,000 via a telegraphic transfer through the Bank of PI. The bank's remittance clerk made a mistake and credited Helen with $1,000,000 which she promptly 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? (1%) (A) No, she had no income because she had no right to the mistakenly credited funds. (B) Yes, income is income regardless of the source. (Javier v. CIR, 199 SCRA 824). (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.

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