1. Raj is a 50% shareholder in an S corporation. In the current year, he...
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1. Raj is a 50% shareholder in an S corporation. In the current year, he is reporting $50,000 of salary, $2,000 of interest income, $20,000 of qualified business income from the S corporation and $10,000 of long-term capital gain. Raj's taxable income before the qualified business income deduction is $65,000. Raj will be allowed a QBI deduction of
A) $11,000. B) $13,000. C) $20,000. D) $4,000.
2. During 2023, Marcia, who is single and is covered under a pension plan at work, contributes $6,500 into a Roth IRA. If her AGI is $77,000, which of the following is true?
A) Only 60% of the contribution is deductible since her AGI exceeds $73,000 by $4,000 and her maximum contribution is phased out by 40%.
B) All of the contribution is deductible.
C) She must withdraw all of the contribution immediately since she is covered under a plan at work.
D) None of the contribution is deductible.
3. Gayle, a doctor with significant investments in the stock market, traveled on a cruise ship to Bermuda. Investment specialists provided daily seminars which Gayle attended. The cost of the cruise for four days is $2,500. Gayle can deduct (before application of any floors)
A) $0. B) $2,500. C) $2,000. D) $1,250.
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