Question
1.Edward and Sally are a married couple.In 2020, Edward worked as an employee of Ajax Corporation and Sally was an attorney.Sally operated her law practice
1.Edward and Sally are a married couple.In 2020, Edward worked as an employee of Ajax Corporation and Sally was an attorney.Sally operated her law practice as a sole proprietorship and had $450,000 of income.Edward and Sally had taxable income of $600,000 before considering the qualified business income deduction.Edward and Sally take the standard deduction of $24,800.
Assume Sally's sole proprietorship paid w-2 wages of $200,000 and had depreciable assets with an unadjusted basis of $800,000.
a.Determine Edward and Sally's qualified business income deduction, if any, for 2020.
Determine Edward and Sally's taxable income after taking into account all deductions.
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