Mr. A and Mr. Z are both sole proprietors. This year, each proprietorship generated $85,000 net cash

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Mr. A and Mr. Z are both sole proprietors. This year, each proprietorship generated $85,000 net cash flow from business operations. Mr. A used the cash to expand his business, while Mr. Z used the cash to make the down payment on a new home for his family. Discuss how the different uses of cash affect each man’s federal income tax for the year.
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