Taxation, 2013 Bar — Question MC-XVI

MULTIPLE CHOICE

Aleta sued Boboy for breach of promise to marry. Boboy lost the case and duly paid the court's award that included, among others, P100,000 as moral damages for the mental anguish Aleta suffered. Did Aleta earn a taxable income? (1%) (A) She had a taxable income of P100,000 since income is income from whatever source. (B) She had no taxable income because it was a donation. (C) She had taxable income since she made a profit. (D) She had no taxable income since moral damages are compensatory (Section 32 (B)(4), NIRC).

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