2017 (Taxation) Bar Exam Questions: Question 17

[Answer/discuss the question below, or see 2017 bar exam Taxation Instructions; 2016 Taxation Questions: 1234567891011121314151618, and 19; See also 2017 Bar Exam: Information, Discussions, Tips, Questions and Results]

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San Juan University is a non-stock, non-profit educational institution. It owns a piece of land in Caloocan City on which its three 2-storey school buildings stood. Two of the buildings are devoted to classrooms, laboratories, a canteen, a bookstore and administrative offices. The third building is reserved as dormitory for student athletes who are granted scholarships for a given academic year.

In 2017, San Juan University earned income from tuition fees and from leasing a portion of its premises to various concessionaires of food, books, and school supplies.

(a) Can the City Treasurer of Caloocan City collect real property taxes on the land and building of San Juan University? Explain your answer. (5%)

(b) Is the income earned by San Juan University for the year 2017 subject to income tax? Explain your answer. (5%)

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