Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000. Required: a. Calculate Katie's deduction for qualified business income. b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000. Deduction for qualified business income Part a Part b
Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000. Required: a. Calculate Katie's deduction for qualified business income. b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000. Deduction for qualified business income Part a Part b
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business income
from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation of
wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000
(unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital
gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000.
Required:
a. Calculate Katie's deduction for qualified business income.
b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the associated
for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000.
Deduction for qualified business income
Part a
Part b
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