1. Chapter 1-part 3
Business Taxes

2. Two types of income for all business-
1.Ordinary gain
2.Capital gain
Ordinary income-income gained through the sale of goods and services.
Capital gain-amount by which the sale price of an asset exceeds the initial purchase price.

3. Companies earning income and capital gains are liable to corporate income tax, which is levied at progressive rates.

4. Tax deductible expenses-In calculating their taxes, corporations are allowed to deduct operating expenses and interest expenses.
Tax deductibility of these expenses reduces the after tax cost