Business Finance Homework Help

This
is income tax preparation class. read the Case Study below requirements
and fill out the excel sheet. i have attached excel sheet template and
note. also, I can provide pdf book and extra material if need it. please do not copy anything from any google resources to solve your own answer.

Case Study

Use the Lesson 4 Case Study Template to complete the assignment, The Excel document has a separate tab for each part. Be sure to answer all questions.

Part 1: True/False

For Part 1, you will determine whether each of the provided statements is true or false. Follow the instructions below to complete the assignment:

1. Identify whether each statement is true or false in the template and explain your reasoning for why the answer is true or false.

2. You must use the textbook or other sources to defend your answer and support your statements.

3. Full APA format is not required for this assignment, but you must include in-text citations within your answers and a reference list at the end of your document for each source you use to answer the questions.

Part 1 Statements

1. Passive activity losses that are not deductible in the current year can be carried forward 20 years and carried back 2 years.
2. Passive activity losses that are not deductible in the current year may be used to offset passive income in future years.
3. Any suspended passive activity losses become fully taxable in the year that the property is sold or disposed of.
4. If a taxpayer becomes a material participant in the passive activity, the unused passive activity losses from the past years are not deductible, but all losses in future years are deductible against active income from the activity.
5. An individual may deduct up to $25,000 of passive losses from rental real estate if the owner actively participates in the activity and owns 20% of the activity.
6. If a real estate professional performs more than 50% of personal services in the business and performs more than 750 hours of services in the real property, the real estate professional can deduct rental losses against other income.

Part 2: Schedule C

Use the following case study information to complete Part 2 of the assignment.

Case Study

John Snow recently purchased a pest control company under a sole proprietorship. The pest control company began business on January 1, Year 1, and became profitable in Year 2. John uses the cash basis of accounting for book and tax purposes.

During Year 2, John had 21 part-time workers, including his wife, Jane, and children, Nancy and Dan ages 18 and 15. Jane was unemployed during Year 1, and John had no other earned income for year except from the pest control company. John and Jane filed a joint income tax return for Year 2 and Year 1. They itemize deductions every year on their joint income tax return.

John’s employees do not receive any health insurance benefits.

The following items are some of the income and expenses that John recorded on his books for Year 2.

For each item of income and expense, determine whether the item should be reported on Schedule C, shown elsewhere on the joint tax return, or not included or deducted on the joint return. Record your answers in Part 2 of the template.

Revenues	Expenses
Cash receipts from customers totaling $200,000.	Cost of goods (pesticides) $20,000.
Loan proceeds from business line of credit $30,000.	Interest paid on residence $10,000.
Bank interest from Nancy’s bank account totaling $200.	Interest paid on business line of credit $5,000.
Bank interest from business savings accounting in the amount of $500.	Principal repayments on line of credit $1,500.
	Office supplies $2,000.
	Contribution to Roth IRA account $1,700.
	Business travel expenses $500.
	State estimated tax payments on business earnings $2,500.
	Property taxes on Snow’s residence $1,000.
	Late payment penalties on business payroll taxes $1,600.
	Repairs and maintenance on company equipment $800.
	Child Support paid to John’s ex-wife $6,000.

Part 3: Self Employment Tax

Use the following case study information to complete Part 3 of the assignment.

Case Study

John Snow is required to pay self-employment tax on the net profits of the business.

Assume his net profit is $100,000 for Year 3. There is $10,000 for Section 1231 gain.

Also, assume the maximum social security tax limit for 2019.

Calculate the self-employment tax for 2019 based on the provided information and record your answers in Part 3 of the template.

1. Total amount of self-employment income
2. Net earning from self-employment
3. Self-employment tax
4. Adjustments for self-employment tax paid