Question

Jared, a sole proprietor, takes a 10-day trip to Las Vegas and spends 7 days on business activities. During the trip, he accumulated the following expenses:

- Airfare = $650

- Lodging = $1,000 ($100 per night)

- Meals = $380 ($38 / day)

- Incidentals = $120 ($12 per day)

The total amount that Jared will be allowed to deduct on his 2018 Schedule C related specifically to the Las Vegas trip is

	A.	$917
	B.	$1,567
	C.	$1,700
	D.	$1,505

Fred is a single sole proprietor with no income other than that of the proprietorship and no itemized deductions. During 2018, his business earned a net income of $136,500 and he paid $4,800 for his health insurance coverage. What are Fred's 2018 Qualified Business Income deduction and 2018 taxable income?

	A.	QBI Deduction = $24,900; Taxable Income = $99,600
	B.	QBI Deduction = $22,971; Taxable Income = $91,886
	C.	QBI Deduction = $22,011; Taxable Income = $88,046
	D.	QBI Deduction = $27,300; Taxable Income = $82,757

Answer 1

1. Answer is option C $1,700

Airfare = $650

+ Lodging (100*7) = $700

+ Meals (38*7) = $266

+ Incidentals (12*7) = $84

Total = 1700

Therefore,

The total amount that Jared will be allowed to deduct on his 2018 Schedule C related specifically to the Las Vegas trip is $1,700

2. Answer is option D QBI Deduction = $27,300; Taxable Income = $82,757

owners of sole proprietorships, partnerships, trusts, and S corporations are allowed to deduct 20% of their qualified business income (QBI) and this is brought into effect for the first time in 2018. Here qualified business income is 136500*20% = 27300