Blake, a recent accounting program graduate, earned the following during the year:
Gross income from employment.....................................$7,000
Provincial lottery winnings............................................2,500
Capital gain on ABC shares...........................................1,200
Inheritance from grandmother.......................................12,000
Interest income from inheritance.......................................800
REQUIRED
(a) In accordance with section 3 of the Income Tax Act, compute Blake's net income for tax purposes for the year.
(b) Assume that Blake has a non-capital loss carry forward from last year of $3,000. Compute his taxable income for the year.