CHAPTER 6 - income or loss from Business

Business income can be earned by all three of the taxable entities within the Canadian tax system-individuals, corporations, and trusts-and each entity determines that income in an identical manner.[1]

There are four classes of income included in the calculation of net business income for tax purposes.

Paragraph 6-7 of the textbook specified that there are four classes of income that are included in the determination of net income for tax purposes. These income sources are:

- Employment Income (Chapter 4)

- Business Income (Chapter 6)

- Property Income (Chapter 7) and

- Capital Gains and Capital Losses (Chapter 8)

The textbook emphasized that business income, property income and capital gains involve the use of property. Read paragraphs 6-11 to 6-14 for the four categories of property in the manner it is used. Figure 6-1 below summarizes the types of income produced by the various categories of property and their income disposition.