Question

Betty operates a beauty salon as a sole proprietorship. Betty also owns and rents an apartment building. This year Betty had the following income and expenses. You may assume that Betty will owe $2,624 in self-employment tax on her salon income, with $1,312 representing the employer portion of the self-employment tax. You may also assume that her divorce from Rocky was finalized in 2016. Interest income Salon sales and revenue Salaries paid to beauticians Beauty salon supplies Alimony paid to her ex-husband, Rocky Rental revenue from apartment building Depreciation on apartment building Real estate taxes paid on apartment building Real estate taxes paid on personal residence Contributions to charity $ 14,975 88,760 46,550 23,640 7,200 35,540 14,100 12,060 6,937 5,029

Answer 1

Az ay Interest Income 14,975 Salon Revenue 88,760 Less: Salaries ( 46,550 Supplice (23.640 Operating income from salon 118,570 Apartment building scenenie 35,540 Less : Depriciation (14,100 Taxes on apartment building K12060) Apartment Building Income 9,380 Lessshare (1,312) deduction (7,200) AGI $34,413 Betty would are $ 2,281 in sell, employment tax. { $ 18,570 x 92-35% X 13:34. of the $2,281, $1,312 V{ $2,281 x 57.51% y uwould be deductible al for the AG I deduction.