Rachel Is an Accountant Who Practices as a Sole Proprietor

question 77

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),she 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.

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Definitions:

Plaintiff

An individual or entity that initiates a lawsuit or legal action against another party, known as the defendant.

Defective

Pertains to a flaw or deficiency in a product that makes it unsafe or unfit for its intended use.

Manufacturers

Entities engaged in the conversion of raw materials or components into finished goods for sale.

Liability

A legal responsibility or obligation, often financial in nature.