Question

Which of the following is a businessfor income tax purposes? why is correct and why are not correct?

Jill and Jack, a married couple, have a rental property.

(b)       Fiona sells her homemade fig jam at the annual school fair.

(c)        Shirley and Jenny have a lifestyle block where they raise alpacas part time on the weekends.

(d)       Jean and Louisa have begun making and selling 100kg pork sausages every week online and at the farmers’ market.

Answer 1

Ans (d )

Business Income for Income taxes:

1. As per federal law business Income from sale of products or services on a regular basis.
2. Rent Received from real estate property.
3. Mai aim of business income to earn profit.
4. Business income is taxed on different entities on different basis.
5. Different basis of business income for income tax purposes are Sole Proprietorship, Partnership, Corporation.

1. Rental income of Jill and Jack from personal property is not a business income for income tax purposes.
2. Fiona sells her homemade fig Jam at the annual school fair, but it is not its regular business income.
3. Shirley and Jenny have a lifestyle block where they raise alpacas part time on weekends, only is not its regularly business income for income tax purposes.
4. Jean and Louisa have begun making and selling 100kg pork sausages every week online and at the farmers’ market. Its it regular business income for income tax purposes