Calculation of Net Income for tax Purposes Example
Doctor Hauser has reported the following amounts of income and expenses for the year
just ended:
Income from employment working as a surgeon for Royal Inland Hospital: $330,400.
Loss from his medical supplies business that he started as a home-based business this
year: $460,200.
Rental income from his rental apartment that he owns in Kamloops: $180,000.
Contribution that he made into his registered retirement savings plan this year: $25,000.
Capital Gains from the sale of his shares in Pelican Industries: $462,000.
Capital Losses from the sale of a parcel of land that he owned for 20 years: $494,000.
His plan was to build his retirement home on this land but unfortunately soil test have
determined the property to be too unstable for development.
Spousal support payments made to his ex-wife as determined by the courts in his divorce
proceedings: $50,600.
Required:
Calculate Doctor Hauser’s Net Income for Tax Purposes following the prescribed order
set out in ITA section 3.