2013 (Taxation) Bar Exam Questions: Multiple Choice Question 14

[Discuss/answer the question below. Or see Taxation Instructions; Taxation Essay Questions: 12, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12; Taxation Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 1315, 16, 17, 18, 19 and 20; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]


The spouses Jun and Elvira Sandoval purchased a piece of land for P5,000,000 and included their two (2) minor children as co-purchasers in the Deed of Absolute Sale. The Commissioner of Internal Revenue (CIR) ruled that there was an implied donation and assessed donors’ taxes against the spouses.

Rule on the CIR’s action. (1%)

(A) The CIR is wrong; a donation must be express.

(B) The CIR is wrong; financial capacity is not a requirement for a valid sale.

(C) The CIR is correct; the amount involved is huge and ultimately ends up with the children.

(D) The CIR is correct; there was animus donandi since the children had no financial capacity to be co-purchasers.


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