33. Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept onemore work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which isdeductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20percent QBI deduction. Cameron files as a single taxpayer, and he did not contribute to charity during the year.a) Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he hasno itemized deductions.b) Which engagement maximizes Cameron's after-tax cash flow? Explain.

Taxable income is the amount of income that is subject to taxation after applying deductions and…

Answered: a) Calculate Cameron's taxable income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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! Required information Problem 12-45 (LO 12-3) (Algo) [The following information applies to the questions displayed below.] Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Mason receives a $191,000 salary working full time for Angels Corporation. Angels Corporation reported $444,000 of taxable business income for the year (2021). Before considering his business income allocation from Angels and the self-employment tax deduction (if any), Mason's adjusted gross income is $191,000 (all salary from Angels Corporation). Answer the following questions for Mason. (Leave no answer blank. Enter zero if applicable.) Problem 12-45 Part a (Algo) a. Assuming the income allocated to Mason is qualified business income, what is Mason's deduction for qualified business income?
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a) Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. b) Which engagement maximizes Cameron's after-tax cash flow? Explain.