Gabby is 40 years old, single, self-employed and claims the standard deduction in 2020. Gabby claimed $ 110,000 in MACRS depreciation on her business property. Depreciation calculated using the Alternative minimum tax rates is $ 130,000. Gabby also sold business property reporting the following gain for tax purposes: Amount realized $ 500,000 Adjusted basis Cost $ 600,000 Acc dep. (320,000) 280,000 Gain 220,000 the AMT Fules is $ 260 00o

Gabby is 40 years old, single, self-employed and claims the standard deduction in 2020. Gabby claimed $ 110,000 in MACRS depreciation on her business property. Depreciation calculated using the Alternative minimum tax rates is $ 130,000. Gabby also sold business property reporting the following gain for tax purposes: Amount realized $ 500,000 Adjusted basis Cost $ 600,000 Acc dep. (320,000) 280,000 Gain 220,000 the AMT Fules is $ 260 00o

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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Rachel, a single taxpayer, operates a construction business as a sole proprietor. This year, Rachel earned $225,000 of qualified business income after paying $40,000 of wages to her employees. The unadjusted basis of her business property totals $10,000. Rachel's taxable income before the deduction for qualified business income is $212,300. What is the amount of her QBI deduction? Group of answer choices $25,000 $15, 100 $29,900 $42,460 $45,000
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Eva received $60,000 in compensation payments from JAZZ Corp. during 2020. Eva incurred $5,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,400. Based on these facts, answer the following questions: Use Tax Rate Schedule for reference. (Leave no answer blank. Enter zero if applicable.) c. Assume that Eva is considered to be a self-employed contractor. What is her self-employment tax liability and additional Medicare tax liability for the year
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Betty sells an interest in a passive activity for $100,000. Her adjusted basis is $70,000 and losses from prior years that were not deductible due to the passive activity loss restrictions total $40,000. The tax effects of the sale are: Gain $30,000 O Gain $60,000 O Loss $10,000 O No gain, No loss.
lly Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2022, she sells the following long-term assets used in her business: Asset Building Equipment Sales Price $ 235,000 85,000 Cost $ 205,000 153,000 Accumulated Depreciation $ 57,000 28,000 lly's taxable income before these transactions is $195,500. What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference. Note: Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount. Description Taxable income Tax liability Amount $ 242,500
In 2016 Gabby purchased and placed into service equipmentused in her business as a cost of $ 800,000. Because of newtechnology, this equipment was not useful after a few years, soGabby sold the equipment in 2020 for $ 5,000. At the time of thesale, Gabby had claimed accumulated tax depreciation of $340,000 on this equipment. Assume that Gabby has substantialincome and has a 2020 marginal ordinary income tax rate of37% and a marginal net capital gain rate of 20%, how much taxwill Gabby save due to the loss on the sale of this asset?
Sachi is single and has taxable income of $33,000 without considering the sale of a capital asset in November of 2021 for $20,000. That asset was purchased six years earlier and has a tax basis of $5,000. The tax liability applicable to only the capital gain is a. $0. b. $2,250. c. $3,000. d. $1,140.
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