Question

Paul sells real estate in the evening and on weekends (considered an active trade or business). He runs his business from a rental office he shares with several other realtors. Paul has been operating in a business-like way since 2004 and has always shown a profit. He had the following income and expenses from his business:

Commissions earned                            $21,250

     

Expenses:                  

Advertising                                        2,200

Telephone                                             95

Real estate license                             130

Rent                                                   6,000

Utilities                                                600

This real estate activity qualifies as a trade or business under the Internal Revenue Code for purposes of the Qualified Business Income deduction.

He has used his Acura TL in his business during the current year. During the year, he properly documented 6,000 business miles. The total mileage on his car (i.e., business-use and personal-use miles) during the year was 15,000 miles. Paul elects to use the standard mileage method to calculate his car expenses. He spent $45 on tolls and $135 on parking related to the real estate business.

Schedule C
Commissions earned	$                                  -
Less Expenses:
Advertising	$                                  -
Telephone	$                                  -
Real estate license	$                                  -
Rent	$                                  -
Utilities	$                                  -
Business transportation:
Business mileage allowance	$                                  -	2019 rate was $ .58 per mile.
Tolls	$                                  -
Parking	$                                  -
Total Schedule C Expenses	$                                  -
Schedule C Net Revenue	$                                  -

1. What is Schedule C net income (Business income)?

Answer 1

Answer :-

Schedule C Business Income Statement

Particulars	Amount
Commission Earned	$ 21250
Less Expenses :
Advertising	$ 2200
Telephone	$ 95
Real State License	$ 130
Rent	$ 6000
Utilities	$ 600
Business Transportation :
Business Millage Allowance (6000 miles * 58 cent per mile )	$ 3480
Toll	$ 45
Parking	$ 135
Totao Schedule C Expense	$ 12685
Total Schedule C Gross Revenue	$ 8565
Qualified Business Income Deduction @ 20% ($ 21250 * 20 %)	$ 4250
Schedule C NET Revenue	$ 4315