You have been engaged to calculate the net income for tax of your client, Tony Timmins. Tony has a variety of sources of income, that you need to take into account; he has asked you maximize any discretionary deductions.

Tony's first source of income comes from a well-established software company. For the 2019 calendar year, he received a salary of $125,000, and he was also provided with an automobile that has a stand-by charge of $2,500. He was also awarded a Christmas bonus of 10% of his salary that he received January 1, 2020. His expenses, that were all reimbursed, totalled $2,000, including non-private health insurance premiums worth $340.

Tony also owns his own home. He paid $1,000,000 for it three years ago. He was thinking about selling, and had an appraisal done in the year, which valued the 2,000 square foot property at $1,200,000. This home is Tony's only property, and is considered to be his principle residence.

Tony is also a bit of an entrepreneur - in 2019 he started an unincorporated business where he moonlighted as a carpenter for wealthy individuals with unique woodworking projects. During the year he purchased a work bench for $1,500, a miter saw for $2,000.The miter saw was not quite what he expected, and the Home Depot would not accept a return, so he sold it for $1,000 on Craigslist; he was actually able to find a better one for less, and purchased a second miter saw in the year for $750. The oversized back-door foyer (300 square feet) of his house was also converted into a workshop. As work ramped up, he would also hire his wife to help out - she was an artist and knew how to stain and seal the finished carpentry work. He paid his wife $25,000 for 100 hours of work; the remaining salaries were paid to workers earning $20/hour. Tony is not an accountant, but prepared a trial balance with all other relevant financial information that can be seen below.

Eventually, Tony decided it made sense to incorporate a small business corporation on August 18, 2019. Once incorporated his corporation obtained $200,000 in financing from a local credit union. He also re-mortgaged his house to invest $50,000 in consideration for the entire capital stock of corporation. His corporation used all the money invested by Tony to pay consultants; however, his biggest client felt things were becoming too corporate and cancelled their contract. With no more clients, before year-end, his local credit union decided to call their loan. Ultimately, Tony decided to return to his roots, and abandon the idea of running the carpentry business through a corporation. As a result, he disposed on his shares on December 30th for $100.

Tony also decided that he wanted to re-pay the mortgage used to finance his fail business venture. He ran a garage sale, where he sold several knick-knacks for total proceeds of $984. Since the garage sale didn't net Tony anywhere near enough, he decided that he was going to sell a rare manuscript, and coin collection he obtained from his grandfather. The manuscript was initially obtained for $30,000, and sold for $40,000, the coins were initially obtained for $10,000 and sold for $900.

In the little downtime remaining, Tony also traded stocks. He purchased 100 Class A shares of a public company for $7 each some time ago, he bought some more in the current year (50 Class A shares at $13/share). The price spiked thereafter, and he sold 50 Class A shares before year-end for proceeds of $5,0000.Tony also carried forward an allowable capital loss from the prior year of $800.

Calculate Tony Timmins' net income for tax purposes for the year ending December 31, 2019, summarize it in the Section 3 format provided.

Tony is also unsure whether the backup for his revenues and expenses is appropriate, and wants to know what is required for filing a successful GST/HST return.

Trial Balance Section 3 Summary (do not edit Section 3 format below, simply link to your work shown bel Subsection 3(a) Income from employment Tony Timmin's Unincorporated Carpentry Income from business Fiscal January 15, 2019 to August 17, 2019 Income from property Other income Account # Description Debits Credits Total 3(a) 1000 Cash 17,894 Subsection 3(b) 1200 Accounts receivable 10,238 Subparagraph 3(b)(i) 2000 Furniture & fixtures 2,250 Taxable capital gains 2250 Accumulated amortization - furniture & fixtures 567 Accounts payable 8,700 Net taxable capital gains from LPP 3000 5000 Retained earnings 10,000 6000 Revenue 75,000 Subparagraph 3(b)(ii) 6100 Bank fees 548 Allowable capital loss 6110 Office expense 7,333 Allowable business investment loss 6120 Telecommunications 450 6130 Legal fees 5,000 Total 3(b) 6135 Landscaping 2,200 567 Subsection 3(c) 6140 Amortization - fixed assets 6150 CRA penalties 3,987 Add amount in 3(a) and 3(b) above 6160 Salaries 40,000 Subdivision e deductions 6170 Meals and entertainment 800 Total 3(c) 6180 Income tax expense 3,000 Subsection 3(d) 94,267 94,267 Total for 3(c) above Net income/(loss) for accounts listed 11,115 Less losses from 3(a) or ABILs Total 3(d) Subsection 3(e) Subsection 3(f)