hrough November, Cameron has received gross income of $127,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,700, which is deductible for AGI. In contrast, engagement 2 will generate $6,400 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and did not contribute to charity during the year. -calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.
hrough November, Cameron has received gross income of $127,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,700, which is deductible for AGI. In contrast, engagement 2 will generate $6,400 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and did not contribute to charity during the year. -calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Through November, Cameron has received gross income of $127,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,700, which is deductible for AGI. In contrast, engagement 2 will generate $6,400 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and did not contribute to charity during the year.
-calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.
Transcribed Image Text:Description
(1) Gross income before new work engagement
(2) Income from engagement
(3) Additional for AGI deduction
(4) Adjusted gross income
(6) Deduction for QBI
Taxable income
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