James Jones is the owner of a small retail business operated as a sole proprietorship. During 2017, his business recorded the following items of income and expense: Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space. Supplies Wages paid to employees Payroll taxes Utilities $147,000 33,500 2,400 42,000 15,000 22,000 1,700 3,600 a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James's 2017 Form 1040. b. Compute self-employment tax payable on the earnings of James's sole proprietorship by completing a 2017 Schedule SE, Form 1040. c. Assume your answers to parts a and b are the same for 2018. Further assume that James's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2018 Section 199A deduction.
James Jones is the owner of a small retail business operated as a sole proprietorship. During 2017, his business recorded the following items of income and expense: Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space. Supplies Wages paid to employees Payroll taxes Utilities $147,000 33,500 2,400 42,000 15,000 22,000 1,700 3,600 a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James's 2017 Form 1040. b. Compute self-employment tax payable on the earnings of James's sole proprietorship by completing a 2017 Schedule SE, Form 1040. c. Assume your answers to parts a and b are the same for 2018. Further assume that James's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2018 Section 199A deduction.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 38P
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Subject: acounting
Transcribed Image Text:James Jones is the owner of a small retail business operated as a sole proprietorship. During 2017, his business recorded the following
items of income and expense:
Revenue from inventory sales
Cost of goods sold
Business license tax
Rent on retail space.
Supplies
Wages paid to employees
Payroll taxes
Utilities
$147,000
33,500
2,400
42,000
15,000
22,000
1,700
3,600
a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James's 2017 Form
1040.
b. Compute self-employment tax payable on the earnings of James's sole proprietorship by completing a 2017 Schedule SE, Form
1040.
c. Assume your answers to parts a and b are the same for 2018. Further assume that James's business is not a service business, and
that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2018 Section 199A deduction.
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Schedule C Schedule SE
Part b
Part a
Part c
Assume your answers to parts a and b are the same for 2018. Further assume that James's business is not a service
business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2018 Section 199A
deduction.
James's 2018 Section 199A deduction
$118.500
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