!Required informationProblem 04-46 (LO 04-3) (Algo)[The following information applies to the questions displayed below.]Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Masonreceives a $186,000 salary working full time for Angels Corporation. Angels Corporation reported$424,000 of taxable business income for the year (2022). Before considering his business incomeallocation from Angels and the self-employment tax deduction (if any), Mason's adjusted grossincome is $186,000 (all salary from Angels Corporation). Mason claims $62,000 in itemizeddeductions. Answer the following questions for Mason.Note: Leave no answer blank. Enter zero if applicable.Problem 04-46 Part c (Algo)c. Assume the same facts as question (b), except that Angels Corporation reported $174,000 of taxable businessincome for the year. What is Mason's deduction for qualified business income? Ignore the wage-based limitationwhen computing the deduction.question (b) said the following: Assuming the business income allocated to Mason is income from aspecified service trade or business,

Any trade or business that provides services in the disciplines of health, law, accounting,…

Answered: Mason (single) is a 50 percent…

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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Thad, a single taxpayer, has taxable income before the QBI deduction of $174,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2022, his proprietorship generates qualified business income of $139,600, W-2 wages of $104,700, and $9,600 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction?
Amor and Deon are the only two members of is a member of AMD (an LLC taxed as a partnership). Amor was allocated $250,000 of business income from AMD for the year. Amor’s marginal income tax rate is 34 percent. The business allocation is subject to 2.9 percent of self-employment tax and .9 percent additional Medicare tax. What is the amount of tax Amor will owe on the income allocation if the income is qualified business income?
B Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 2021, the corporation accrues interest of $4,000 on a loan from Bonnie and also accrues a $15,000 bonus to Bonnie. The bonus is paid to Bonnie on February 1, 2022; the interest is not paid until 2023. How much can B Corporation deduct on its 2022 tax return? a. $19,000 b. $4,000 c. $12,000 d. $15,000 e. $0
Peter Samuels owns and manages his single member LLC that provides a wide variety of financial services to his clients. He is married and will file a joint tax return with his spouse, Amy. His LLC reports $300,000 of net income, W-2 wages of $120,000, and assets with an unadjusted basis of $75,000. Their taxable income before the QBI deduction is $ 285,000 (this is also their modified taxable income). What is their QBI deduction for 2023?
Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Mason receives a $184,500 salary working full time for Angels Corporation. Angels Corporation reported $418,000 of taxable business income for the year (2022). Before considering his business income allocation from Angels and the self-employment tax deduction (if any), Mason's adjusted gross income is $184,500 (all salary from Angels Corporation). Mason claims $59,000 in itemized deductions. Answer the following questions for Mason. Note: Leave no answer blank. Enter zero if applicable. c. Assume the same facts as question (b), except that Angels Corporation reported $168,000 of taxable business income for the year. What is Mason's deduction for qualified business income? Ignore the wage-based limitation when computing the deduction. *16,800 and 84,000 are both incorrect answers!
B Corporation, a calendar year-end, accrual-basis taxpayer, is owned 75 percent by Bonnie, a cash-basis taxpayer. On December 31, 2022, the corporation accrues interest of $4,000 on a loan from Bonnie and also accrues a $15,000 bonus to Bonnie. The bonus is paid to Bonnie on February 1, 2023; the interest is not paid until 2024. How much can B Corporation deduct on its 2023 tax return for these two expenses? a. $15,000 b. $19,000 c. $4,000 d. $0 e. $12,000
Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Mason receives a $180, 000 salary working full time for Angels Corporation. Angels Corporation reported $400,000 of taxable business income for the year (2023). Before considering his business income allocation from Angels and the self-employment tax deduction (if any), Mason's adjusted gross income is $180,000 (all salary from Angels Corporation). Mason claims $50,000 in itemized deductions. Answer the following questions for Mason. Assuming the business income allocated to Mason is income from a specified service trade or business, what is Mason's deduction for qualified business income? Ignore the wage-based limitation when computing the deduction.
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.
Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Mason receives a $191,500 salary working full time for Angels Corporation. Angels Corporation reported $196,000 of taxable business income for the year (2023). Before considering his business income allocation form Angels and the self-employment tax deduction (if any), Mason's adjusted gross income is $191,500 (all salary from Angels Corporation). Mason claims $73,000 in itemized deductions. Assuming the business income allocated to Mason is income from a specified service trade or business, what is Mason's deduction for qualified business income? Ignore the wage-based limitation when computing the deduction.
Taylor, a single taxpayer, has taxable income before the QBI deduction of $194,900 in 2021. Taylor, a CPA, operates an accounting practice as a single-member LLC (which he reports as a sole proprietorship). During 2021, his proprietorship reports net income of $150,000, W-2 wages of $125,000, and $10,000 of qualified property. What is Taylor's qualified business income deduction? a.$31,500. b.$30,000. c.$12,000. d.$-0-.
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The Blue Corporation, a C corporation, is owned 100% by Tim Morgan and had taxable income in 2019 of $535,000. Tim is also an employee of the corporation. In December 2019, the corporation has decided to distribute $450,000 to Tim and has asked you whether it would be better to distribute the money as a dividend or salary. Tim, a single taxpayer, is in the 37% marginal tax bracket. How would you respond to Blue Corporation? Consider only income taxes for this problem. (Tim's taxable income exceeds $434,550.) LOADING... Calculate the taxes for Blue and Tim under each option. (For the purpose of this analysis, we will only consider the marginal and capital gain rates for Tim. Ignore additional taxes imposed on high income taxpayers.) Distributed as dividend Distributed as salary Taxes for Blue Taxes for Tim Total tax liability Enter any number in the edit fields and then click Check Answer.…

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