Rachel Is an Engineer Who Practices as a Sole Proprietor

question 18

Essay

Rachel is an engineer who practices as a sole proprietor.This year, Rachel had net business income of $500,000 from her business.Assume that Rachel pays $20,000 wages to her employees, she has $500,000 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 $380,000.Calculate Rachel's deduction for qualified business income.

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Definitions:

Electrons

Subatomic particles with a negative charge, found in all atoms and playing a key role in chemical reactions and electricity.

Hydrogen Bonding

A weak type of chemical bond that is common in water and organic compounds, forming between a hydrogen atom and a more electronegative atom.

Compound

Substance having two or more different elements in a fixed ratio.

Molecules

Groups of two or more atoms held together by chemical bonds.