CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
41st Edition
ISBN: 9781337389518
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 7, Problem 16DQ
To determine

Identify the relevant tax issue for Person A.

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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 $147,000 Rent on retail space Supplies Wages paid to employees Payroll taxes Utilities 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.
How does the tax benefit rule apply in the following cases? Question Content Area a.  In 2021, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the furniture was $600. In 2022, Orange took a bad debt deduction for the $1,000. In 2023, Sammy inherited some money and paid Orange the $1,000 he owed. Orange's owner was in the 35% marginal tax bracket in 2021, the 12% marginal tax bracket in 2022, and the 35% marginal tax bracket in 2023. Orange Furniture must include $fill in the blank 6af05cfde02efa1_1 in gross income as the recovery of a prior deduction. The timing of the income and deductions cost Orange $fill in the blank 6af05cfde02efa1_2.   Question Content Area b.  In 2022, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the…
Keiji Jones is the owner of a small retail business operated as a sole proprietorship. During 2022, 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 Required: $ 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 Keiji's 2022 Form 1040. b. Compute self-employment tax payable on the earnings of Keiji's sole proprietorship by completing a 2022 Schedule SE, Form 1040. c. Assume that Keiji's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate Keiji's 2022 QBI deduction, before any overall taxable income limitation. Complete this question by entering your answers in the tabs below. Schedule C Schedule SE Part a Part b Part c Assume that Keiji's…
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