1. What type of income does a sole proprietor of a business receive? 2. What is the difference…

1. What type of income does a sole proprietor of a business
receive?

2. What is the difference between earned income and unearned
income?

3. How is the gross income from a rental property or a
royalty property determined?

4. Explain how the capital recovery concept applies to the
taxation of annuities. Consider both purchased annuities and pension payments
in your answer.