Practice question
A person receives PHP200,000 under a genuine enforceable loan with an obligation to repay the same principal. No forgiveness, service payment or other gain is involved. Does the cash receipt alone establish PHP200,000 income?
- Yes; every borrowing is automatically profit equal to principal.
- Yes; repayment obligations are legally irrelevant in every case.
- No; because borrowed cash can never be spent.
- No; the loan liability and absence of stipulated gain prevent that conclusion from the inflow alone.
- Yes; all loans are gifts by definition.
Legal references
- NIRC, Sections 5-7,22-23 and32, as enacted in RA8424 and subject to the cited later amendments: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- RA12214, May29,2025, CMEPA, including amended NIRC Sections22,25 and32: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html
- CIR v. Shinko Electric Industries, G.R.226287, July6,2021, main decision, income concept and requisites: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/67666
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