Given:
Commission income = $180,000
Medical insurance = $10,000
Salary expense = $40,000
Medical insurance premium paid for himself = $7,000
Office rental expense = $30,000
Medical expenses paid for himself = 5,000
Computation of business income:
Business income = Total revenue - Total expenses
Business income = $180,000 - ($10,000 - $40,000 - $30,000)
Business income = $180,000 - $80,000
Business income = $100,000
Note: Self-incurred expenses are not included in business expenses.
Computation of AGI:
AGI = Business income - Deduction from schedule c
AGI = $100,000 - Medical insurance premium paid for himself
AGI = $100,000 - $7,000
AGI = $93,000
Therefore, option "B" is the correct answer to the following question.
