Modified TRUE or FALSE

1) Gift, bequest, devise or descent of income from any property, in cases of transfers of divided interest, shall be included in the gross income.

2) Recoveries of damages, representing compensation for personal injuries arising from libel, defamation, slander breach of promise to marry, alienation of affection are not subject to income tax and shall not be included in the gross income.

3) In case of conflict between the provisions of a tax treaty and domestic law, the provisions of the domestic law shall prevail.

4) A stipulation in a loan agreement, between the borrower (a government agency) and a private international bank, as lender, that the interest income to be derived by the lender shall be made free from all Philippine taxes is valid.

5) If taxes are paid by the lessee on leased property, the same shall form part of rental income of the lessor.

6) Where the rate of tax imposed under the domestic law is lower than the rate imposed under the tax treaty, the lower tax rate under the domestic law shall prevail.

7) As a rule, an employee lawfully dismissed is not entitled to a separation pay.

8) In case of conflict between tax laws and generally accepted accounting principles (GAAP), GAAP shall prevail over tax laws.

9) The P90,000 exclusion from gross income is not applicable to self-employed individuals and income generated from business.

10) Proceeds of life insurance policies paid to the heirs or beneficiaries upon the death of the insured, whether in a single sum or otherwise are excluded from gross income unless designation is revocable.