Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000. Required: a. Calculate Katie's deduction for qualified business income. b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000. Part a Part b Deduction for qualified business income $ 89,920 $ 79,920
Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000. Required: a. Calculate Katie's deduction for qualified business income. b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000. Part a Part b Deduction for qualified business income $ 89,920 $ 79,920
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 30P
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Question
Transcribed Image Text:Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katie's share of net business
income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katie's allocation
of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One's qualified property is $150,000
(unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital
gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000.
Required:
a. Calculate Katie's deduction for qualified business income.
b. Assume the same facts provided above, except Katie's net business income from Engineers One is $400,000 (net of the
associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is
$350,000.
Part a
Part b
Deduction for qualified business income
89,920
$
79,920
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT