Nicole sold the equipment in 2022 for $4,500. How does Nicole report the $4,500 on her 2022 tax return? As ordinary income of $4,500 only. As ordinary income of $4,500 plus self-employment tax of $636. As a capital loss of $10,850. Nicole does not have to report the sale proceeds as income since the fitness equipment was already fully expensed on a prior tax return.
Nicole sold the equipment in 2022 for $4,500. How does Nicole report the $4,500 on her 2022 tax return? As ordinary income of $4,500 only. As ordinary income of $4,500 plus self-employment tax of $636. As a capital loss of $10,850. Nicole does not have to report the sale proceeds as income since the fitness equipment was already fully expensed on a prior tax return.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 44P
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A10
Transcribed Image Text:Nicole operates her personal training business as a sole proprietor. She took
$15,350 in bonus depreciation in 2020 for fitness equipment she purchased.
Nicole sold the equipment in 2022 for $4,500. How does Nicole report the
$4,500 on her 2022 tax return? As ordinary income of $4,500 only. As ordinary
income of $4,500 plus self-employment tax of $636. As a capital loss of
$10,850. Nicole does not have to report the sale proceeds as income since the
fitness equipment was already fully expensed on a prior tax return.
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ISBN:
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Author:
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Publisher:
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