Campbell a single taxpayer, has $400,000 of profits from her general store that she operates as a sole proprietorship. She has $

Question

3 years ago

6

Campbell a single taxpayer, has $400,000 of profits from her general store that she operates as a sole proprietorship. She has $

100,000 of employee wages, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income?
A) $80,000

B)$0

C) $100,000

D) 26,000

E) $50,000

Business

1 answer:

ella [17] · Answer 1 · 2022-08-02T17:59:17+03:00

Answer:

A) $80,000

Explanation:

According to the Internal Revenue Service (IRS), the deduction would be claim as a lower value of 20% qualified business income plus 20% of real investment or 20% of taxable income less net capital gains

So, 20% qualified business income = $400,000 × 20% = $80,000

And, the 20% of taxable income = $500,000 × 20% = $100,000

So, the lower value would be $80,000