Rachel Is an Accountant Who Practices as a Sole Proprietor

question 12

Essay

Rachel is an accountant who practices as a sole proprietor.This year, Rachel had net business income of $270,000 from her practice.Assume that Rachel pays $50,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $225,000.Calculate Rachel's deduction for qualified business income.

---

Definitions:

CPI

A gauge of the average price levels for a mix of consumer services and products like medical care, transportation, and food, the Consumer Price Index assesses this through a weighted average.

Deflation

A decrease in the general price level of goods and services in an economy over time.

European Nations

Countries located in the continent of Europe, each with its own government, culture, and economy.

Booming Economy

An economic state characterized by rapid growth, increased spending, and low unemployment.