What is robert net income from his business

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Reference no: EM132234222

Question - Robert Lento, the sole proprietor of a consulting business, has gross receipts of $600,000 in 2017. Expenses paid by his business are:

Advertising $2,500

Employee Salaries 150,000

Office rent 24,000

Supplies 18,000

Taxes and licenses 17,000

Travel (other than meals) 3,800

Meals and entertainment 2,400

Utilities 3,800

Employee health insurance premiums 6,600

Health insurance premiums for Robert 2,200

Robert purchased a new car for his business on May 15 for $28,000. He also purchased $50,000 of new 5-year equipment and $238,000 of used 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 for 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?

Reference no: EM132234222

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