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algol13
3 years ago
5

Rob's wife, Marie, has a wage income of $250,000. They jointly sold stocks in 2019 and generated a long-term capital gain of $13

,000. Rob and Marie have no dependents and in 2019, they take the standard deduction of $24,400. The income threshold for QBI limitations starts at $315,000 for married filing jointly taxpayers.
a. What is Rob and Marie's taxable income before the QBI deduction?

b. What is Rob and Marie's QBI?

What is Rob and Marie's QBI deduction?
Business
1 answer:
Kaylis [27]3 years ago
4 0

Answer:

Explanation:

According to IR Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction. Some trusts and estates may also claim the deduction directly.

The deduction allows them to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned by a C corporation or by providing services as an employee isn't eligible for the deduction.

1. QBI component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust or estate. Depending on the taxpayer's taxable income, the QBI Component is subject to limitations including:

 

a. The type of trade or business,

b. The amount of W-2 wages paid by the qualified trade or business, and

c. The unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business.

These limitations do not apply to taxpayers with taxable income at or below a certain threshold. For 2018, the threshold amount is $315,000 for a married couple filing a joint return, and $157,500 for all other taxpayers.

STEPS ARE:

1. Original QBID = 154K*20% = 30,800

2. Wage/Cap. Investment limitation: a) wage limitation = 58K*50%= 29,000

b) wage/capital limit. = wage(58K*25%) +capital(300K*2.5%) =14,500+7,500=22K

We take the larger of them => 29K

3) Since original QBID is greater than wage limitation, we must use reduction ratio. In this case:

408K (taxable income) - 315K(threshold)/100,000 = 0.93

4) Now we subtract the wage limitation from original QBID (30,800 - 29,000) * 0.93= 1,674.

5) Finally, subtract that from original QBID 30,800-1,674=29,126.

29,126 their final QBID

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4 0
3 years ago
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Rolling Coast Inc. issued BBB bonds two years ago. These bonds provided a yield to maturity (YTM) of 11.5 percent. Long-term ris
vaieri [72.5K]

Answer: 9.2%

Explanation:

The interest rate that Rolling Coast should expect to issue new bonds will be calculated thus:

Firstly, we will calculate the previous risk premium on BBB bonds which will be:

= 11.5% - 8.7% = 2.8%

Then, the new risk premium on BBB bonds will be:

= Previous risk premium / 2

= 2.8% / 2

= 1.4%

Then, the interest rate that Rolling Coast should expect to issue new bonds will be:

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8 0
2 years ago
A new technological breakthrough increases production for an industry and shifts the supply curve to the right. If the firm ____
Katyanochek1 [597]

Answer:

The correct answer is letter "C": produces products that are considered elastic.

Explanation:

Elasticity refers to the sensitivity of a good or service to reflect change in its supply or demand after a change in price. A product's supply is said to be elastic if the changes in the quantity supplied increases and it immediately determines a price in the price.

Thus, if for technological reasons the output of a company increases, considering that the product is elastic, the prices will increases which will provide the organization more revenue. That firm will be more than glad about the technological advance.

6 0
3 years ago
Suppose that the quantity of DVD players sold increased from 200 to 400 when the price fell from $225 to $175. Over this price r
Nataly_w [17]

Answer:

Option D.

Explanation:

Given information:

Q_1=200, Q_2=400

P_1=225, P_2=175

Formula for price elasticity of demand is

E_d=\frac{Q_2-Q_1}{P_2-P_1}\times \frac{P_1+P_2}{Q_1+Q_2}

Substitute the given values in the above formula.

E_d=\frac{400-200}{175-225}\times \frac{225+175}{200+400}

E_d=\frac{200}{-50}\times \frac{400}{600}

E_d=-\frac{8}{3}

E_d\approx -2.67

Absolute value is

|E_d|= |-2.67|=2.67

The absolute value of the price elasticity of demand for DVD players is 2.67.

Therefore, the correct option is D.

6 0
3 years ago
Matt is considering the purchase of a condo on a mortgage. However, he is not sure on the amount of mortgage he is eligible for.
Rudiy27

Answer:

A. Prequalification

Explanation:

First, the Options to the Question

a. Prequalification

b. A contingency clause

c. A Multiple Listing Service

d. Due diligence

What is a PreQualification in Mortgage Processing

Because most persons who are interested in buying a home do not have hundreds of thousands of dollars in cash to purchase the home of their dreams, the concept of mortgage is to approach a lender who will then advance the needed sum for the purchase and then the borrower will pay the advanced sum over some time (most times up to 30 years) at an interest rate.

A PreQualification is a process through which the lender evaluates the creditworthiness of the borrower and also decide the amount of loan the borrower is entitled to. This is done through the financial documents and records made available to the lender by the borrower

One important takeaway from a prequalification is that it is an approximation of what a borrower is entitled to base solely on the information given to the lender. It is, therefore, an approximation which can be less or more when the official application for the loan is submitted.

As stated in the question, getting a prequalification helps Matt to identify and understand the areas of problems and credit report errors that may arise and then he can use the prequalification information to attend to these errors and ensure a proper application is submitted that will allow him to maximise the amount of loan that can be made available to him.

Once Matt has corrected errors and identified problems that may arise on his mortgage application, he then gathers the relevant document and goes for the first formal process in mortgage processing which is the preapproval.

6 0
3 years ago
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