Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 3, Problem 2MCQ
To determine
Introduction:
Taxable income refers to the income derived after specific deductions. A sole proprietor is a person who is the only of the business and is supposed file Schedule C for the earnings from business.
To choose: The correct option.
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Students have asked these similar questions
Jayda, who is self-employed, maintains an office in her home that comprises 16% (370 square feet) of total floor space. Gross income for
her business is $44,150, and her residence expenses are as follows:
Real property taxes
Interest on mortgage
Operating expenses
Depreciation (based on 16% business use)
If required, round your final answer to the nearest dollar.
a. What is Jayda's office in the home deduction based on the regular method?
$
$4,860
8,100
4,050
6,395
b. What is Jayda's office in the home deduction based on the simplified method?
Rita owns a sole proprietorship in which she works as a management consultant. She maintains an officein her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,600. The followinghome-related expenses have been allocated to her home office under the actual expense method forcalculating home office expenses.
Real property taxes $ 1,600Interest on home mortgage 5,100Operating expenses of home 800Depreciation 1,600
Also, assume that, not counting the sole proprietorship, Rita AGI is $60,000. Rita itemizes deductions,and her itemized deduction for non-home business taxes is less than $10,000 by more than the realproperty taxes allocated to business use of the home.Assume Rita’s consulting business generated $15,000 in gross income.
a. What is Rita's home office deduction for the current year?
b. What would Rita's home office deduction be if her business generated…
Breanna Vail is a self-employed accountant who has one less-than-half-time employee. During 2019, the following items existed for her business:
Accounting services revenue: $100,000
Payments to Breanna: $40,000
Wages to her employee: 25,000
Rent Expense: 12,000
Tax preparation software: 3,500
Office supplies and utilities: 3,000
Payroll tax expense for her employee: 1,800 (federal and state)
Business meals expenses: 1,000
Personal health insurance premiums: 3,600
Personal Social Security Tax: 7,560
What is the amount of Breanna's Schedule C earnings for 2019?
a) $46,316
b) $56,000
c) $14,000
d) $54,200
Chapter 3 Solutions
Income Tax Fundamentals 2020
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Which of the following formulas represents the...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Heather drives her minivan 953 miles for business...Ch. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Under the high-low method, the federal per diem...
Ch. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - Prob. 20MCQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - Prob. 23MCQCh. 3 - Stewie, a single taxpayer, operates an activity as...Ch. 3 - Prob. 2PCh. 3 - Lawrence owns a small candy store that sells one...Ch. 3 - Business with gross receipts of $25 million or...Ch. 3 - Teresa is a civil engineer who uses her automobile...Ch. 3 - Prob. 7PCh. 3 - Martha is a self-employed tax accountant who...Ch. 3 - Prob. 9PCh. 3 - Go to the U.S. General Services Administration...Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Marty is a sales consultant. Marty incurs the...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Cooper and Brandy are married and file a joint...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Cindy operates a computerized engineering drawing...Ch. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Lew is a practicing CPA who decides to raise...
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