Question

1. Jose purchased a vehicle for business and personal use. In 2019, he used the vehicle 17,500 miles (80% of total) for business and calculated his vehicle expenses using the standard mileage rate (mileage was incurred ratably throughout the year). He paid $1,600 in interest and $155 in property taxes on the car.

Required:

Calculate the total business deduction related to the car:

Schedule C:

Schedule A:

2.

Jordan took a business trip from New York to Denver. She spent two days in travel, conducted business for nine days, and visited friends for five days. She incurred the following expenses:

Airfare	$	400
Lodging		2,000
Meals		500
Entertainment of clients		400

Required:

How much of these expenses can Jordan deduct? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar value.)

Deduction:

3.  

Eric, who is single, has income from his Schedule C of $112,500. His taxable income is $90,000 after his other deductions.

Required:

What is Eric’s QBI deduction for 2019?

Answer 1

Answer to Q NO 1

Total business deduction related to car

The business deduction will be allowed for car which is used for business purpose(80%)

Therefore interest paid = 80%($ 1600)

And Property tax paid = 80%($155)

Total 80% ($1755) = $1404 will be allowed as deduction for business

Answer to Q No 2

If any expenses incurred for official purpose then such expense shall be allowed as deduction

The following days will be considered as official.

2 days travel and 9 days for business trip = 11days

Total Expenses = $400 + $2000+ $500+ $400= $ 3300 for 16days

Therefore for 11days $ 3300 × 11÷16 = $2268.75 = $2269(approx) shall be allowed as deduction

Answer to Q No 3

QBI deduction shall be allowed for filing with single status and having taxable income less than $157500 is 20%allowed as deduction

Therefore 20 % ($112500) =$22500 shall be allowed as QBI deduction.