Robert Lento, the sole proprietor of a consulting business, has gross receipts of $600,000 in 2019. Expenses
Question:
Robert Lento, the sole proprietor of a consulting business, has gross receipts of $600,000 in 2019. Expenses paid by his business are
Robert purchased a new car for his business on May 15 for $50,000. He also purchased $50,000 of new 5-year equipment and $238,000 of 7-year fixtures on August 1. Robert drove the car 10,000 miles (8,000 for business and 2,000 personal miles). He paid $200 for business-related parking and tolls. He also paid $1,000 insurance and $1,200 for gasoline and oil for the new car. He would like to maximize his deductions.
a. What is Robert’s net income (loss) from his business?
b. How much self-employment tax must Robert pay?
c. If this is Robert’s only source of income, what is his adjusted gross income?
Step by Step Answer:
Taxation For Decision Makers 2020
ISBN: 9781119562108
10th Edition
Authors: Shirley Dennis Escoffier, Karen Fortin