Alice Smith Has Provided You with the Following Information Pertaining

question 8

Essay

Alice Smith has provided you with the following information pertaining to her 20x0 taxes:
• The financial statements for Alice's dental practice reported a net income of $110,000.
• Amortization of $15,000 was reported in the expenses.
• Capital cost allowance has been accurately calculated at $12,500 and has not been accounted for in the financial statements.
Alice conducted scientific research and experimental development (SR&ED)in 20x0.She met with a CRA agent who verified that $40,000 of her expenditures were qualified SR&ED activities.These costs were treated as capital items on her financial statements.
• Alice raises sheep on her land at her home in the country.She had a farming loss of $9,000 in 20x0.
Required:
Calculate Alice's minimum net income for tax purposes for 20x0.

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Definitions:

Obligee

The party in a contract or agreement who is entitled to receive a performance or benefit from the obligor.

Obligor

An individual or entity legally obliged to provide a payment or service to another party under the terms of a contract.

Delegation

The act of entrusting another person with responsibility and authority to perform a specific task or function that was originally one's own duty.

Assignment

The act of transferring rights, duties, or responsibilities from one party to another, commonly seen in contracts or agreements.