Final answer:
Dover Inc.'s taxable income in Province 1 is its income from operations in that province, amounting to $550,000, as dividends received are not typically subject to province-specific taxation and are dealt with at the corporate level.
Step-by-step explanation:
To calculate Dover Inc.'s taxable income in Province 1, we must consider the income from operations and then adjust it for any relevant income or deductions specific to that province. The income from operations in Province 1 is $550,000. According to Canadian tax rules, dividends received from a taxable Canadian corporation generally come with a deduction called the Dividend Received Deduction (DRD), which means that these dividends are not subject to tax when received by another corporation. However, the question does not ask for the entire corporation's taxable income but specifically for Province 1. Typically dividends received would not be allocated to any specific province as they tend to come from an investment of corporate surplus and thus would be dealt with at the corporate level rather than the provincial level. Therefore, in the absence of any specific allocation rules or additional details in the question, the most appropriate answer is that Dover Inc.'s taxable income in Province 1 is simply its income from operations in that province, which is $550,000.