Tara's Sole Proprietorship Consists of a Bakery and Retail Food

question 104

Multiple Choice

Tara's sole proprietorship consists of a bakery and retail food sales.The bakery's DPGR is $700,000,but after CGS,direct expenses,and a ratable portion of indirect expenses are deducted,QPAI is $200,000.W-2 wages related to DPGR are significant.The retail food sales have a loss of $1 million.If Tara files a joint return and her modified AGI is $109,420,what is her allowable DPAD,if any,for 2012?

• A)None.
• B)$6,000.
• C)$9,000.
• D)$18,000.
• E)Some other amount.

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Definitions:

Consumer Credit

A financial arrangement that allows individuals to purchase goods or services now and pay for them in the future.

Trade Credit

A form of credit extended by suppliers to their customers, allowing them to purchase goods or services and pay for them at a later date.

Insufficient Credit

A condition where an individual or entity lacks the necessary borrowing capacity due to limited credit history or poor credit ratings.

Open Charge Account

A type of credit account that allows customers to make purchases up to a pre-approved limit and pay for them at a later date.