Question

1. In 2018, Cindy is married and files a joint return. She operates a sole proprietorship...

1. In 2018, Cindy is married and files a joint return. She operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $225,000 and deductions of $525,000, resulting in a loss of $300,000. What is Cindy's excess business loss for the year?

a. $0

b. $30,000

c. $250,000

d. $280,000

e. None of the above.

2. In 2018, Theo, a single taxpayer operates a sole proprietorship in which mataerially participates. His proprietorship generates gross income of $320,000 and deductions of $600,000, resulting in a loss of $280,000. The large deductions are due to the acquision of equipment and the use of immediate expense and additional first year depreciation to deduct all of the acquisitions. What is Theo's excess business loss for the year?

a. $0

b. $30,000

c. $250,000

d. $280,000

e. None of the above.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1) Answer (A) 0

Calculation of Excess business loss for the year:

Particulars Amount($)
Aggregate business deductions 525,000
Less: Aggregate business gross income (225,000)
Less: Threshold amount (500,000)
Excess Business loss 0

2) Answer (B) $30,000

Calculation of Excess business loss for the year:

Particulars Amount($)
Aggregate business deductions 600,000
Less: Aggregate business gross income (320,000)
Less: Threshold amount (250,000)
Excess Business loss 30,000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2018, she...
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2018, she sells the following long-term assets used in her business: Asset Sales Price Cost Accumulated Depreciation Building $234,200 $204,200 $56,200 Equipment 84,200 152,200 27,200 Lily's taxable income before these transactions is $164,700. What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2018, she...
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2018, she sells the following long-term assets used in her business: Asset Sales Price Cost Accumulated Depreciation Building $230,000 $200,000 $52,000 Equipment 80,000 148,000 23,000 Lily's taxable income before these transactions is $160,500. What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
2. Jason and Paula are married. They file a joint return for 2020 on which they...
2. Jason and Paula are married. They file a joint return for 2020 on which they report taxable income before the QBI deduction of $200,000. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business and neither is a specified services business. Jason’s sole proprietorship reports $150,000 of net income, W-2 wages of $45,000, and has qualified property of $50,000. Paula’s partnership reports a loss for the year, and...
Jason and Paula are married. They file a joint return for 2020 on which they report...
Jason and Paula are married. They file a joint return for 2020 on which they report taxable income before the QBI deduction of $274,500. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business, and neither is a "specified services" business. Jason's sole proprietorship generates $167,200 of qualified business income and W–2 wages of $50,000 and has qualified property of $20,000. Paula's partnership reports a loss for the year,...
an operates a housecleaning business as a sole proprietorship. She oversees a team of 10 cleaning...
an operates a housecleaning business as a sole proprietorship. She oversees a team of 10 cleaning personnel, markets the business, and provides supplies and equipment. The business has been generating net taxable profits of $50,000 per year, before considering the QBI deduction. As a sole proprietor, Megan qualifies for the 20 percent deduction, reducing taxable income from the business to $40,000. a. Assume that Megan’s marginal tax rate on ordinary income is 35 percent and that she has no pressing...
Grace is a lawyer who operates her business as a sole proprietorship. During 2017 she receives...
Grace is a lawyer who operates her business as a sole proprietorship. During 2017 she receives $150,000 for her professional services. Of the amount collected, $50,000 was for services provided in 2016. At the end of 2017, her A/R balance was $65,000, which represented amounts due for services rendered in 2017. In addition, Grace received a pre-payment of $45,000 at the end of 2017 for services to be rendered in 2018. a. Calculate Grace’s income using the cash basis method...
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2019, she...
Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2019, she sells the following long-term assets used in her business: Asset Sales Price Cost Accumulated Depreciation Building $230,000 $200,000 $52,000 Equipment 80,000 148,000 23,000 Lily's taxable income before these transactions is $190,500. What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)     
1. John incurred $10,000 of business bad debts for his business which operates as a sole...
1. John incurred $10,000 of business bad debts for his business which operates as a sole proprietorship. How are these treated on John’s 2018 tax return: Deducted as a long term capital loss Deducted as a short term capital loss Deducted as a trade or business expense on John’s Schedule C Not deducted on John’s 2018 tax return. 2. Martha loaned her friend, Joan, $30,000 three years ago. Joan used the money to start a business on Etsy. After three...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) $33,000 State and local income taxes 4,800 State sales tax 1,300 Real estate taxes 6,000 Home mortgage interest 5,000 Automobile loan interest 750 Credit card interest 1,000 Charitable contributions 7,000 Casualty loss (before 10% limitation but after $100 floor; not in a Federally declared disaster area) 34,000 Unreimbursed employee business expenses...
1/ Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred...
1/ Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) $33,000 State and local income taxes 4,800 State sales tax 1,300 Real estate taxes 6,000 Home mortgage interest 5,000 Automobile loan interest 750 Credit card interest 1,000 Charitable contributions 7,000 Casualty loss (before 10% limitation but after $100 floor; not in a Federally declared disaster area) 34,000 Unreimbursed employee business...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT