Zofia is self-employed, files a Schedule C, and owns a qualified business for calculation of QBI. Zofia had $80,000 in taxable businessincome on Schedule C. On 10/30/2022, Zofia sold some office equipment for $6,660 that was purchased on 04/01/2019 for a cost of$8,325. The office equipment is being depreciated over seven year MACRS half-year convention. Zofia has no other qualifiedbusinesses. Zofia's taxable income for the income limitation is $102,000. (Hint: it will be useful to use information from Chapter 6, Form8995, Schedule 1, and Form 1040 as a guide.) Use Table 6A-1Required:a. What is the Section 1245 depreciation recapture (if any) on the sale of the office equipment?b. What is the self-employment deduction on the income from Zofia's business?c. What is Zofia's Qualified Business Income (QBI) for Form 8995?d. What is Zofia's Qualified Business Income Deduction (QBID) for Form 8995?e. Assuming there are no other items for Form 8995, what amount(s) will be entered on Line 13 of Form 1040?f. Assuming there are no other items for Schedule 1, what amount(s) will be entered on Line 8 of Form 1040?g. Assuming there are no other items for Schedule 1, what amount(s) will be entered on Line 10a of Form 1040?Complete this question by entering your answers in the tabs below.Required ARequired BRequired C Required DRequired E Required F< Required AWhat is the Section 1245 depreciation recapture (if any) on the sale of the office equipment?Note: Do not round your intermediate calculations and round your answer to the nearest whole dollar.Depreciation recapture (if any) on the sale of the office equipmentRequired GRequired B >

Deductions under income tax refer to specific expenses or amounts that taxpayers are allowed to…

Answered: Zofia is self-employed, files a…

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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Aleesia purchased a rental property in April 2017. Her basis for depreciation was $210,000. She has no adjustments to her basis. After preparing her own taxes for five years, she went to a paid preparer for her 2021 return. The preparer realized Aleesia had not claimed depreciation any of the previous years. She was allowed to claim $5,409 for 2016, and $7,636 each year for 2017, 2018, 2019, 2020, and 2021. 210,000 How much catch-up depreciation can Aleesia claim on her 2021 Form 3115? $22,908 $28,317 $35,953 $43,589 5,409 7,636
Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. a. Clem is self-employed, and this year he incurred $830 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $5,490 to provide coverage for himself and Wanda (not through an exchange).What is the deductible amount for AGI? b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,270 in utilities and $985 in depreciation.What is the deductible amount for AGI c. Clem paid self-employment tax of $17,600 (the employer portion is $8,800), and Wanda had $3,500 of Social Security taxes withheld from her pay.What is the…
Andrew, a self-employed professional, used his personal vehicle for business trips this year. He paid $2,700 for gasoline. His car's depreciation for full business use would be $6, 200. Andrew drove a total of 18, 500 miles during the year, with 3,700 miles documented for business purposes. What business expense amount can Andrew deduct (if any) for these trips, considering that the IRS allows a standard mileage deduction of $0.56 per mile for business use? ***This question already posted and received correct answer. Kindly Don't answer this question again. If you answer i will give 10 dislikes. ****
Laura sold her office building to the accounting firm that bought her firm. Unfortunately, she had to repossess the building after less than a year. Choose the response that correctly states the amount of Laura's gain or loss on the repossessed real property, based on the following facts. The building had a fair market value of $54,000 on the date of repossession. The unpaid balance of the installment obligation at the time of repossession was $56,000, the gross profit percentage was 25%, and the costs of repossession were $600. (a) Loss of $13,400 (b) Loss of $11,400 (c) Gain of $11,400 (d) Gain of $13,400
Jos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limit
Dana forms a small manufacturing company. Her company places the following ng properties into service during the year, on the dates indicated: Type of property Date placed in service Cost_____ Business building April 6 $275,000 Furniture June 5 $57,000 Machinery September 2 $65,000 Computer December 27 $25,000 She chooses not to do any Section 179 expense, and also elects not to take bonus depreciation. She uses MACRS depreciation. Calculate the first year depreciation on the building, and also on the machinery:
During the tax year, Monica incurred one personal casualty loss due to a federally declared disaster. The amount of the loss after reimbursements is $8,025. Monica will not be replacing any of the damaged property. Monica's adjusted gross income is $50,000. What is the amount of the casualty loss deduction to report on Schedule A (Form 1040)? $2,925 $3,025 $7,925 $8,025
On July 1 of year 1, Elaine purchased a new home for $430,000. At the time of the purchase, it was estimated that the property tax bill on the home for the year would be $8,600 ($430,000 * 2%). On the settlement statement, Elaine was charged $4,300 for the year in property taxes and the seller was charged $4,300. On December 31, year 1 Elaine discovered that the real property taxes on the home for the year were actually $9,600. Elaine wrote a $9,600 check to the local government to pay the taxes for that calendar year (Elaine was liable for the taxes because she owned the property when they became due). what amount of real property taxes is Elaine allowed to deduct for year 1? (Assume not married filing separately.) Multiple Choice ___ $0 ___ $4,300. ___ $4,800. ___ $5.300.
Kyra, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a "specified services" business. In 2022, the business pays $60,000 of W–2 wages, has $150,000 of qualified property, and generates $200,000 of qualified business income. Kyra also has a part-time job earning wages of $11,500 and receives $3,450 of interest income. Her standard deduction is $12,950. Assume the QBI amount is net of the self-employment tax deduction. What is Kyra's tentative QBI based on the W–2 Wages/Capital Investment Limit? Determine Kyra's allowable QBI deduction.
On October 15, 2023, Jon purchased and placed in service a used car. The purchase price was $38,000. This was the only business use asset Jon acquired in 2023. He used the car 80% of the time for business and 20% for personal use. Jon used the regular MACRS method. Calculate the total maximum deduction Jon may take for 2023 with respect to the car, if he (a) elects out of bonus deprecation, and (b) if he takes bonus depreciation. (This differs from the question asked in the text.) If he elects out of bonus depreciation: If bonus is taken (because it was NOT elected out):
January Smith purchased a fancy car, a Ferrari, for $70,000 and claimed CA overtime in Class 10.1. Her opening UCC balance for the current year was $25,000 andshe sold the car for $30,000. She has no other pieces of equipment in that pool.Calculate the total impact on her taxable income.

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