Practice question
Which activity most clearly generates active business income on the stated facts?
- Holding a bank deposit without operating a banking business
- Receiving a cash dividend merely as an investor
- Regularly manufacturing and selling furniture through an operating business
- Receiving passive book royalties without conducting a related business
- Holding an investment without participating in its earning activity
Legal references
- NIRC Sections 22(MM) and 24(B), as amended by RA 12214, Sections 3-4: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html
- NIRC Sections 32 and 34: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
Answer this question in flashcards to review your response and continue practicing.