Practice question
A GPP computes net income after deducting its operating expenses. A partner then subtracts those same partnership expenses again from the already-net distributive share, without any separate professional activity. Which is correct under RR 8-2018?
- Every partner may deduct the same costs repeatedly
- The GPP’s income is never taxed anywhere
- Partnership net income is automatically compensation
- Every distribution is a gift
- The partner cannot claim further deductions from that already-net share under the stated GPP rule
Legal references
- NIRC, Sections 26, 32(B) and 40(A), (C)(3)-(5), read with later amendments: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- BIR Revenue Regulations 8-2018, compensation, minimum-wage and professional/GPP rules, read with subsequent amendments: https://bir-cdn.bir.gov.ph/local/pdf/RR%20No.%208-2018.pdf
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