Question

# 1. Jose purchased a vehicle for business and personal use. In 2019, he used the vehicle...

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?

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

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

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.

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