Omar (single) is a 50 percent owner in Cougar LLC (taxed as a partnership). Omar works half time for Cougar and receives guaranteed payment of $50,000. Cougar LLC reported $450,000 of business income for the year (2020). Before considering his 50 percent business income allocation from Cougar and the self-employment tax deduction (if any), Omar's adjusted gross income is $210,000 (includes $50,000 guaranteed payment from Cougar and $160,000 salary from a different employer). Answer the following questions for Omar. 1. Assuming the income allocated to Omar is qualified business income, what is Omar's deduction for qualified business income? 2.What is Omar's net investment income tax liability (assume no investment expenses)? 3. What is Omar's self-employment tax liability (exclude the guaranteed payment)? 4.What is Omar's additional Medicare tax liability?
Omar (single) is a 50 percent owner in Cougar LLC (taxed as a partnership). Omar works half time for Cougar and receives guaranteed payment of $50,000. Cougar LLC reported $450,000 of business income for the year (2020). Before considering his 50 percent business income allocation from Cougar and the self-employment tax deduction (if any), Omar's adjusted gross income is $210,000 (includes $50,000 guaranteed payment from Cougar and $160,000 salary from a different employer). Answer the following questions for Omar. 1. Assuming the income allocated to Omar is qualified business income, what is Omar's deduction for qualified business income? 2.What is Omar's net investment income tax liability (assume no investment expenses)? 3. What is Omar's self-employment tax liability (exclude the guaranteed payment)? 4.What is Omar's additional Medicare tax liability?
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 45P
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Transcribed Image Text:Omar (single) is a 50 percent owner in Cougar LLC (taxed as a partnership). Omar works half time for Cougar and receives
guaranteed payment of $50,000. Cougar LLC reported $450,000 of business income for the year (2020). Before
considering his 50 percent business income allocation from Cougar and the self-employment tax deduction (if any),
Omar's adjusted gross income is $210,000 (includes $50,000 guaranteed payment from Cougar and $160,000 salary
from a different employer). Answer the following questions for Omar.
1.Assuming the income allocated to Omar is qualified business income, what is Omar's deduction for qualified business
income?
2.What is Omar's net investment income tax liability (assume no investment expenses)?
3. What is Omar's self-employment tax liability (exclude the guaranteed payment)?
4.What is Omar's additional Medicare tax liability?
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