Rachel Is an Accountant Who Practices as a Sole Proprietor

question 56

Essay

Rachel is an accountant who practices as a sole proprietor.This year,Rachel had net business income of $200,000 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 $140,000.Calculate Rachel's deduction for qualified business income.