Taxation, 2009 Bar — Question XI

MULTIPLE CHOICE

Raffy and Wena, husband and wife, are both employed by XXX Corporation. After office hours, they jointly manage a coffee shop at the ground floor of their house. The coffee shop is registered in the name of both spouses. Which of the following is the correct way to prepare their income tax return? Write the letter only. DO NOT EXPLAIN YOUR ANSWER. (2%) (a) Raffy will declare as his income the salaries of both spouses, while Wena will declare the income from the coffee shop. (b) Wena will declare the combined compensation income of the spouses, and Raffy will declare the income from the coffee shop. (c) All the income will be declared by Raffy alone, because only one consolidated return is required to be filed by the spouses. (d) Raffy will declare his own compensation income and Wena will declare hers. The income from the coffee shop shall be equally divided between them. Each spouse shall be taxed separately on their corresponding taxable income to be covered by one consolidated return for the spouses. (e) Raffy will declare his own compensation income and Wena will declare hers. The income from the coffee shop shall be equally divided between them. Raffy will file one income tax return to cover all the income of both spouses, and the tax is computed on the aggregate taxable income of the spouses.

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