Zofia is self-employed, files a Schedule C, and owns a qualified business for calculation of QBI. Zofia had $86,000 in taxable business income on Schedule C. On 10/30/2022, Zofia sold some office equipment for $6,000 which was purchased on 04/01/2019 for a cost of $7,500. The office equipment is being depreciated over seven year MACRS half-year convention. Zofia has no other qualified businesses. Zofia's taxable income for the income limitation is $102,000. (Hint: it will be useful to use information from Chapter 6, Form 8995, Schedule 1, and Form 1040 as a guide.) Use Table 6A-1 ***********..... Required: a. What is the Section 1245 depreciation recapture (if any) on the sale of the office equipment? b. What is the self-employment deduction on the income from Zofia's business? c. What is Zofia's Qualified Business Income (QBI) for Form 8995?
Zofia is self-employed, files a Schedule C, and owns a qualified business for calculation of QBI. Zofia had $86,000 in taxable business income on Schedule C. On 10/30/2022, Zofia sold some office equipment for $6,000 which was purchased on 04/01/2019 for a cost of $7,500. The office equipment is being depreciated over seven year MACRS half-year convention. Zofia has no other qualified businesses. Zofia's taxable income for the income limitation is $102,000. (Hint: it will be useful to use information from Chapter 6, Form 8995, Schedule 1, and Form 1040 as a guide.) Use Table 6A-1 ***********..... Required: a. What is the Section 1245 depreciation recapture (if any) on the sale of the office equipment? b. What is the self-employment deduction on the income from Zofia's business? c. What is Zofia's Qualified Business Income (QBI) for Form 8995?
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 22CE
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