In 2020, William Wallace's sole proprietorship, Western Wear Apparel, generated $162,426 Schedule C net profit ($150,000 net earnings from self-employment). In addition, William recognized a $25,000 Section 1231 gain on a sale of land formerly used by the business as a parking lot. The business checking account earned $250 interest income. William qualifies for the QBI deduction without regard to the wageor taxable income limitations.Which of these income items are subject to self-employment tax?Compute William's 2020 self-employment tax, assuming he has no other earned income.Compute William's 2020 QBI deduction.Compute the total increase in William's 2020 taxable income attributable to his business.

Question

Quizplus · Accepted Answer

The Answer of In 2020, William Wallace's sole proprietorship, Western Wear Apparel, generated $162,426 Schedule C net profit ($150,000 net earnings from self-employment). In addition, William recognized a $25,000 Section 1231 gain on a sale of land formerly used by the business as a parking lot. The business checking account earned $250 interest income. William qualifies for the QBI deduction without regard to the wageor taxable income limitations.Which of these income items are subject to self-employment tax?Compute William's 2020 self-employment tax, assuming he has no other earned income.Compute William's 2020 QBI deduction.Compute the total increase in William's 2020 taxable income attributable to his business.

In 2020, William Wallace's Sole Proprietorship, Western Wear Apparel, Generated