Subject: Taxation I

Dr. Sweet is a dentist with a well-established practice in Smith Falls, Ontario. She has sought your advice regarding the deductibility of the following expenditures made during the current taxation year:

1. Insurance payments included a $680 premium for coverage of her office and contents, $1,800 for malpractice coverage, and $1,700 in life insurance premiums.

2. Payments were made to a collection agency in the amount of $1,250 for assistance in collecting past due amounts from patients.

3. Contributions of $600 were made to various registered charities.

4. Dr. Sweet paid a total of $18,000 to her husband for his services as a full-time bookkeeper and receptionist.

5. A total of $4,600 was spent to attend a dental convention in Phoenix, Arizona. Dr. Sweet was accompanied by her husband and $1,500 of the total cost of the trip relates directly to him.

6. An amount of $1,000 was paid for membership in a racquets club. In addition, $1,300 was spent for court time, approximately 40 percent of which was for time spent playing with patients.

7. Dr. Sweet paid $1,200 in legal and accounting fees. These fees related to fighting a personal income tax reassessment for a previous tax year. The fight was not successful and, as a consequence, Dr. Sweet was required to pay additional taxes of $13,000 plus $1,600 in interest on the late payments.

8. During the year, Dr. Sweet spent $3,200 purchasing provincial lottery tickets.

Required: Advise Dr. Sweet with respect to the deductibility of the preceding expenditures in the calculation of Net Income For Tax Purposes. Explain your position on each expenditure

note: for better understanding include any calculation involved with the explanation