Taxation, 2012 Bar — Question 12

MULTIPLE CHOICE

During the audit conducted by the BIR official, it was found that the rental income claimed by the corporation was not subjected to expanded withholding tax. Accordingly, the claimed rental expense: a) Is deductible from the gross income of the corporation, despite non-withholding of income tax by the corporation; b) Is deductible from the gross income of the corporation, provided that the 5% expanded withholding tax is paid by the corporation during the audit; c) Is not deductible from gross income of the corporation due to non-withholding of tax; d) Is deductible, if it can be shown that the lessor has correctly reported the rental income in his tax return.

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