Practice question
A taxpayer proves only that a transfer entered a bank account. The evidence shows it was internal operating support without gain, as in the stipulated Shinko-type facts. The collector says the absence of a separately named exemption automatically makes it taxable income. Which is correct?
- Every receipt requires an exemption even if no income exists
- An account entry alone proves taxable gain
- One must first establish income gain and realization; an exclusion question does not replace that threshold inquiry
- All corporate funding is always taxable compensation
- Only the transfer’s currency matters
Legal references
- https://lawphil.net/judjuris/juri2021/jul2021/gr_226287_2021.html — CIR v. Shinko Electric Industries, G.R. No. 226287, July 6, 2021, main opinion
- https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html — NIRC, section 32(B)(1) and (3)
- https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html — RA 12214, section 8 amending NIRC section 32
Answer this question in flashcards to review your response and continue practicing.