Required information[The following information applies to the questions displayed below]Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Masonreceives a $180,000 salary working full time for Angels Corporation. Angels Corporationreported $400,000 of taxable business income for the year (2023). Before considering hisbusiness income allocation from Angels and the self-employment tax deduction (if any), Mason'sadjusted gross income is $180,000 (all salary from Angels Corporation). Mason claims $50,000in 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 $150,000 of taxable businessincome for the year. What is Mason's deduction for qualified business income? Ignore the wage-based limitationwhen computing the deduction.Deduction for qualified business incomeCATE

Qualified small business owners and independent contractors can deduct up to twenty percent of their…

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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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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
Required information [The following information applies to the questions displayed below.] Kiyara (single) is a 50 percent shareholder of Guardian Corporation (an S Corporation). Kiyara does not do any work for Guardian Corporation. Guardian Corporation reported $324,000 of business income for the year (2022). Before considering her business income allocation from Guardian Corporation and the self-employment tax deduction (if any), Kiyara's adjusted gross income was $274,000 (all employee salary). Kiyara has $41,200 in itemized deductions. Answer the following questions for Kiyara. Note: Leave no answer blank. Enter zero if applicable. d. What is Kiyara's additional Medicare tax liability (include all earned income in computing the tax)? Additional Medicare tax liability
Janna had a tax basis of $19,000 in her Mimikaki stock (Mimikaki has been an S corporation since inception). In 2018, Janna was allocated $24,000 of ordinary income from Mimikaki. What is the amount and character of gain she recognizes from end of the year distributions in each of the following alternative scenarios, and what is her stock basis following each distribution? (Leave no answer blank. Enter zero if applicable.) a. Mimikaki distributes $12,000 to Janna. b. Mimikaki distributes $24,000 to Janna. c. Mimikaki distributes $36,000 to Janna. d. Mimikaki distributes $48,000 to Janna.
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
Required information [The following information applies to the questions displayed below.] Kiyara (single) is a 50 percent shareholder of Guardian Corporation (an S Corporation). Kiyara does not do any work for Guardian Corporation. Guardian Corporation reported $300,000 of business income for the year (2023). Before considering her business income allocation from Guardian Corporation and the self-employment tax deduction (if any), Kiyara's adjusted gross income was $250,000 (all employee salary). Kiyara has $40,000 in itemized deductions. Answer the following questions for Kiyara. Note: Leave no answer blank. Enter zero if applicable. a. What is Kiyara's self-employment tax liability? Answer is complete and correct. Self-employment tax liability $ 0
[The following information applies to the questions displayed below.] Jacob is a member of WCC (an LLC taxed as a partnership). Jacob was allocated $80,000 of business income from WCC for the year. Jacob's marginal income tax rate is 37 percent. The business allocation is subject to 2.9 percent of self-employment tax and 0.9 percent additional Medicare tax. Note: Round your intermediate calculations to the nearest whole dollar amount. b. What is the amount of tax Jacob will owe on the income allocation if the income is qualified business income (QBI) and Jacob qualifies for the full QBI deduction?
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.
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-.
Thad, a single taxpayer, has taxable income before the QBI deduction of $189,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2021, his proprietorship generates qualified business income of $151,600, W–2 wages of $113,700, and $12,000 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?
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 $446,000 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. Answer the following questions for Mason. Assume the same facts as question (b), except that Angels Corporation reported $196,000 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.

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