(55 points) Tony and Carmella are a married couple who live in New Jersey. Tony opened a butcher shop/deli business at the beginning of 2022 , called Satriale's Pork Store (SPS). The following information pertains to SPS 2022 activities: - SPS uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. - SPS received $850,000 of sales revenue and reported $510,000 of cost of goods sold (meat). - SPS paid $180,000 of compensation to employees (assume these amounts include applicable payroll taxes, if any). - SPS paid $15,000 of rent for a building and equipment, $10,000 for advertising, 5,000 for repairs and maintenance, and $5,000 of other deductions. - Tony entered into a loan with a "business associate" to help open SPS. The loan required him to pay $2,000 in interest per month beginning on June I. In December, Tony prepaid January's interest payment at the request of the "business associate". - SPS wrote off $3,000 of bad debt during the year. - SPS had tax depreciation of $60,000. - SPS bribed a health inspector with $2,000 in order to pass their inspection. - SPS took out a life insurance policy for Tony that paid the business $1,000,000 upon his untimely death. The premiums were paid out of the business and totaled $10,000 for the year (expensed as "other deductions"). - SPS donated meat to a local politicians' campaign picnic. The meat cost SPS $800, but was provided to the politician at no charge, in exchange for future political favors. The meat was expensed as part of Cost of Goods Sold. - In October, Tony traveled to Las Vegas for the Meat Lover's Convention. He attended the convention for 4 days and stayed an extra day to relax by the pool. He paid $200 for his conference fec, $400 for his airfare, $1,000 for his hotel ( $250 ight), and $60 /day in meal. He also played some slots and won $200 during his trip. In addition to SPS activity, Tony and Carmella had the following activity during 2022: - A $2,000 qualified dividend and a $2,500 in short-term capital gain from the sale of stock. - Real estate taxes on their personal residence of $5,000, and mortgage interest of $12,000. - Tony paid $6,000 in SE health insurance premiums - The total amount of self-employment calculated on the income from SPS is $4,200 - They gave $12,000 to their local church. - They paid $6,000 in estimated tax payments to the state of New Jersey - They paid $25,000 in federal estimated tax payments Using the information above, answer the following questions: (20 pts) What is the net business income of SBS (10pts) What is Tony and Carmella's AGI (10 pts)What is Tony and Carmella's Taxable Income (10 pts) What is Tony and Carmella's Total Tax Liability (5 pts) What is Tony and Carmella's Tax Due/(Refund)
