Roquan, a single taxpayer, is an attorney and practices as a sole proprietor. This year, Roquan had netbusiness income of $90,000 from his law practice (net of the associated for AGI self-employment taxdeduction). Assume that Roquan pays $40,000 in wages to his employees, has $10,000 of property(unadjusted basis of equipment he purchased last year), and has no capital gains or qualified dividends. Histaxable income before the deduction for qualified business income is $100,000.Required:a. Calculate Roquan's deduction for qualified business income.b. Assume the same facts provided above, except Roquan's taxable income before the deduction forqualified business income is $300,000.Note: For all requirements, leave no answer blank. Enter zero if applicable.

The deduction for qualified business income amount to the lesser of: 20% of the qualified business…

Answered: Roquan, a single taxpayer, is an…

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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Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income from his single-member LLC (a law firm). He reports his business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Molly is employed as a tax manager by a local CPA firm. Their modified taxable income is $400,100 (this is also their taxable income before the deduction for qualified business income). Determine their allowable QBI deduction for 2022. 10,000 X
Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $63,000 with an adjusted basis of $37,800 for $41,580. Later in the year, Lena sold another piece of equipment purchased two years ago with an adjusted basis of $18,900 for $12,285. What are the tax consequences of these tax transactions? Lena has an ordinary gain of $fill in the blank 2 from the sale of the first equipment. Lena has a section 1231 loss of $fill in the blank 4 from the sale of the second equipment.
Kesha, a sole proprietor, is engaged in a cash basis service business. In the current year, she incorporates the business to form Kiwi Corporation. She transfers assets with a basis of $500,000 (fair market value of $1,200,000), a bank loan of $450,000 (which Kiwi assumes), and $80,000 in trade payables in return for all of Kiwi’s stock. What are the tax consequences of the incorporation of the business?
Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $26,000 with an adjusted basis of $15,500 for $17,000. Later in the year, Lena sold another piece of equipment purchased two years ago with an adjusted basis of $8,200 for $5,500. What are the tax consequences of these tax transactions? Lena has of $ from the sale of the first equipment. Lena has of $ from the sale of the second equipment.
Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $159,400 each. Dexter's basis in each lot sold is $111,580, and he incurs total selling expenses of $6,376 on each sale. What is the amount of Dexter's capital gain and ordinary income? If required, round your answers to the nearest dollar. Dexter has a realized and recognized gain of $ as a capital gain. of which $ is classified as ordinary income and
Campbell, a single taxpayer, has $110,000 of profits from her accounting business that she operates as a sole proprietorship. She has no employees, no qualified property, no capital gains and the deductible portion of self-employment tax was $10,000. Campbell also had $120,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income? A) $100000 B) $20000 C) $10000 D) $24000
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
In 2006, Douglas purchased an office building for $500,000 to be used in his business. He sells the building in the current tax year. Explain whether his recognized gain or loss for regular income tax purposes will be different from his recognized gain or loss for AMT purposes.
Determine the taxpayer's current-year (1) economic income and (2) gross income for tax purposes from the following events: (LO.1) a. Ja-ron's employment contract as chief executive of a large corporation was terminated, and he was paid $500,000 not to work for a competitor of the corporation for five years. b. Elliot, a six-year-old child, was paid $5,000 for appearing in a television commercial. His parents put the funds in a savings account for the child's education. c. Valery found a suitcase that contained $100,000. She could not determine who the owner was. d. Winn purchased a lottery ticket for $5 and won $750,000. e. Larry spent $1,000 to raise vegetables that he and his family consumed. The cost of the vegetables in a store would have been $2,400. f. Dawn purchased an automobile for $1,500 that was worth $3,500. The seller was in desperate need of cash.
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.
1. Steve is married filing jointly with his wife Nancy and operates a business as a sole proprietor. His business is a small tax and accounting business where he has two employees who are paid a total of $90,000in wages. The business has no significant assets. In 2023, Steve reported qualified business income of $225,000and the taxable income before the QBI deduction of $229,000. What is the amount of Steve and Nancy's QBI deduction for 2023?
Charlotte is a partner in, and sales manager for, CD Partners, a domestic business that is not a "specified services" business. During the tax year, she receives guaranteed payments of $177,400 from CD Partners for her services to the partnership as its sales manager. In addition, her distributive share of CD Partners' ordinary income (its only item of income or loss) was $106,440. What is Charlotte's qualified business income? $fill in the blank 1 ______?

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