Dale and Eleanor are married taxpayers. In 2021, they will file a joint return and will take the $25,100 standard deduction.  Dale is the owner of Just Delicious, a boutique candy store in Last Resort, Florida.  Just Delicious, which Dale operates as sole proprietorship, had qualified business income of $500,000 in 2021.  He paid $50,000 in w-2 wages (note: these wages are included in the $50,000 of qualified business income).  In addition, the unadjusted basis in assets was $1,000,000 (this amount includes candy making equipment as well as retail fixtures).  Eleanor is director of human resources for a large corporation.  Dale and Eleanor’s gross income excluding the $500,000 from Just Delicious was $300,000  How do I determine Dale and Eleanor’s taxable income in 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dale and Eleanor are married taxpayers. In 2021, they will file a joint return and will take the $25,100 standard deduction.  Dale is the owner of Just Delicious, a boutique candy store in Last Resort, Florida.  Just Delicious, which Dale operates as sole proprietorship, had qualified business income of $500,000 in 2021.  He paid $50,000 in w-2 wages (note: these wages are included in the $50,000 of qualified business income).  In addition, the unadjusted basis in assets was $1,000,000 (this amount includes candy making equipment as well as retail fixtures).  Eleanor is director of human resources for a large corporation.  Dale and Eleanor’s gross income excluding the $500,000 from Just Delicious was $300,000

  1.  How do I determine Dale and Eleanor’s taxable income in 2021?
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