Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income...

  

 

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Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income from his single-member LLC (a law firm). He reports his business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Molly is employed as a tax manager by a local CPA firm. Their modified taxable income is $386,600 (this is also their taxable income before the deduction for qualified business income). Determine their allowable QBI deduction for 2020. On May 31, 2016, Gustave purchases a new automobile for $28,000. He uses the car 90% for business and drives the car as follows: 5,000 miles in 2016, 14,000 miles in 2017, 11,000 miles in 2018 and 9,800 miles in 2019. Gustave is self-employed. Determine Gustave's basis in the business portion of the auto as of January 1, 2020, under the following assumptions: If required, round your computations to the nearest dollar. a. Gustave uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2016: $ 2017: $ 2018: $ 2019: $ Gustave's adjusted basis in the auto on January 1, 2020, is $ b. Gustave uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. Assume the recovery limitation for 2016 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year) and $1,875 (fourth year).] Compute his depreciation deductions for year. Click here to access the depreciation table. 2016: $ B MACRS Accelerated Depreciation for Personal Propert Assuming Half-Year Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 3-Year 5-Year (200% DB) (200% DB) Recovery Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 33.33 44.45 14.81* 7.41 20.00 32.00 19.20 11.52* 11.52 5.76 7-Year (200% DB) 14.29 24.49 17.49 12.49 8.93* 8.92 8.93 4.46 10-Year (200% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 15-Year (150% DB) 5.00 9.50 8.55 7.70 6.93 6.23 5.90* 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462* 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 Year 2020 2019 2018 2017 2016 Rate per Mile 27 cents 26 cents 25 cents 25 cents 24 cents Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income from his single-member LLC (a law firm). He reports his business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Molly is employed as a tax manager by a local CPA firm. Their modified taxable income is $386,600 (this is also their taxable income before the deduction for qualified business income). Determine their allowable QBI deduction for 2020. On May 31, 2016, Gustave purchases a new automobile for $28,000. He uses the car 90% for business and drives the car as follows: 5,000 miles in 2016, 14,000 miles in 2017, 11,000 miles in 2018 and 9,800 miles in 2019. Gustave is self-employed. Determine Gustave's basis in the business portion of the auto as of January 1, 2020, under the following assumptions: If required, round your computations to the nearest dollar. a. Gustave uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2016: $ 2017: $ 2018: $ 2019: $ Gustave's adjusted basis in the auto on January 1, 2020, is $ b. Gustave uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. Assume the recovery limitation for 2016 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year) and $1,875 (fourth year).] Compute his depreciation deductions for year. Click here to access the depreciation table. 2016: $ B MACRS Accelerated Depreciation for Personal Propert Assuming Half-Year Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 3-Year 5-Year (200% DB) (200% DB) Recovery Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 33.33 44.45 14.81* 7.41 20.00 32.00 19.20 11.52* 11.52 5.76 7-Year (200% DB) 14.29 24.49 17.49 12.49 8.93* 8.92 8.93 4.46 10-Year (200% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 15-Year (150% DB) 5.00 9.50 8.55 7.70 6.93 6.23 5.90* 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462* 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 Year 2020 2019 2018 2017 2016 Rate per Mile 27 cents 26 cents 25 cents 25 cents 24 cents

Answer rating: 100% (QA)

Solution a We have b We have 1n1 12 is absolutely convergent c Since Since 12 is divergent th... View the full answer