1. Elizabeth. owner of a retail clothing boutique in FancySchmancySurburb, Illinois, operates this store as a sole proprietorship. In 2021, the store had a qualified business income of $850,000. She paid w-2 wages of $100,000 and her unadjusted basis in assets is $2,000,000 (this amount includes furniture and fixtures and the building which she owns. Note: the value of the land is excluded from the $2,000,000).
   
   Elizabeth is married to Henry. Their gross income excluding income from her shop is $400,000 They file jointly and take the $25,100 standard deduction.
   
   1. Determine Elizabeth and Henry’s taxable income in 2021.
   2. Assume instead that rather than a retail store, Elizabeth was an attorney and her $850,000 of income was from the practice of law. All other facts are the same. Determine Elizabeth and Henry’s taxable income in 2021

Answer rating: 100% (QA)

Working Particulars Amount Amount Value of business property net of land value 2000000 Depreciation ... View the full answer