Compute wilmas allowable qbi deduction

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Question - In 2019, Wilma Way's sole proprietorship, WW Bookstore, generated $120,000 net profit. In addition, Wilma recognized a $17,000 gain on the sale of business furniture and shelving, all of which was recaptured as ordinary income. The business checking account earned $960 interest income.

Required -

1. Which of these income items are subject to self-employment tax?

2. Compute Wilma's 2019 self-employment tax.

3. Compute Wilma's allowable QBI deduction, assuming $43,000 of W-2 wages and $90,000 unadjusted basis of tangible depreciable property. Further assume the overall taxable income limitation on QBI does not apply.

4. Compute Wilma's 2019 taxable income from her bookstore activity.

Reference no: EM132520409

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