ch.4 sources of income

Question 1

Employment income

Answer 1

employment income includes:
• salary, wages, and gratuities received
• bonuses, tips, honoraria, and commissions
• other employment income inclusions arising from employment
• stock option benefits
• deductions allowed against employment income

Question 2

Business income/loss

Answer 2

a profession, a calling, a trade, or the manufacturing of any kind of product and an adventure or concern in the nature of trade. Business income may be earned by individuals, corporations, partnerships, or trusts. In the context of personal tax, business income is income earned by an individual, such as a proprietor of an unincorporated business.

Question 3

Property income / loss

Answer 3

• interest income from savings, deposits, loans, bonds, and debentures
• dividend income
• rental income
• royalty income

Question 4

Capital gains and losses

Answer 4

produce property or business income is disposed of for proceeds greater or less than the original cost of the property.
only one-half (50%) of capital gains are taxed. The taxable portion is referred to as a taxable capital gain. One-half (50%) of capital losses (referred to as allowable capital losses) are deductible, but only against taxable capital gains.

Question 5

Other sources of income and deductions

Answer 5

Additional sources of income include, but are not limited to:
•    pension income
•     retiring allowances
•     death benefits
•     annuity payments
•     spousal support
•     amounts received from deferred income plans (such as RRSPs)
•    social assistance payments
•     workers' compensation
Additional deductions from income include, but are not limited to:
•     spousal support
•     moving expense
•     RRSP contributions
•     Old Age Security clawbacks
•    child-care expenses
•     fees related to objections and appeals