I understand the concept of individual taxation, but I find correctly presenting the answers difficult for Becker simulations. I will describe below, and any help would be much appreciated. Thanks!
Q) Determine the amount of gross income to be reported on the individual income tax return and indicate the amount excluded if any.
Case 1: Schedule C revenues of $50K, COGS $10K, Supplies $1K, Business meals $4K, FICA taxes $2.6K and salary to the sole proprietor $25K.
Answer per Becker: Included = $37K, Excluded = $5.2K (FICA tax, it states salary is a draw as it is not a deduction)
My answer: Included = $37K (50 - 10 - 1 - 2), Excluded = ?? ( no idea)
- I actually do not understand this question, so explanation would be really helpful :)
Case 2: Loss of $25K on a rental property that the taxpayer manages part time (AGI = $110K)
Answer per Becker: Included = $20K, Excluded = 5K
My answer: Included = (20K), Excluded = (5K)
- I thought it should be presented as negative, because it is a loss. As such, loss would translate to a negative adjustment on the 1040 right? But, becker shows as positive amounts.
Thank you for your help!
A - (5/2012)
R - (1/2012) Done!
F - (10/2011) Done!
