Campbell, a Single Taxpayer, Has $400,000 of Profits from Her

question 32

Multiple Choice

Campbell, a single taxpayer, has $400,000 of profits from her general store, which she operates as a sole proprietorship.She has no employees, $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)$100,000.
• B)$80,000.
• C)$20,000.
• D)$1,000.
• E)$0.

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Definitions:

Land's Cost

The purchase price of land plus any additional costs spent to put it into use, such as legal fees and land grading expenses.

Prepaid Insurance

An asset account that reflects the amount paid for insurance policies in advance, before the coverage period.

Insurance Expense

This refers to the costs incurred by a business or individual as a result of purchasing insurance to protect against risks.

Unexpired Insurance

The portion of an insurance premium that has not yet expired or been used and is considered a prepaid expense.