James Jones is the owner of a small retail business operated as a sole proprietorship. During 2019, his business recorded the following items of income and expense: Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space Supplies Wages paid to employees Payroll taxes Utilities $147,000 33,500 2,400 42,000 15,000 22,eee 1,700 3,600 Required: a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James's 2019 Form 1040. b. Compute self-employment tax payable on the earnings of James's sole proprietorship by completing a 2019 Schedule SE, Form 1040. c. Assume that James's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2019 QBI deduction, before any overall taxable income limitation. 2019 (Form 1040 or 1040-SR) (Sole Proprietorship) Department of the Treasury - Internal Go to www.irs.gov/Schedule for instructions and the latest Information. Revenue Service (99) Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships generally must file Form 1065. Name of proprietor James Jones A Principal business or profession, including product or service (see instructions) Attachment Sequence No. 09 Social security number (SSN) B Enter code from instructions C Business name. If no separate business name, leave blank. D Employer ID number (EIN) (see instr.) E Business address (including suite or room no.) Yes No City, town or post office, state, and ZIP code F Accounting method: (1) Cash (2) Accrual (3) Other (specify) G Did you "materially participate in the operation of this business during 2019? If "No," see instructions for limit on losses H If you started or acquired this business during 2019, check here 1 1 Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) JIf "Yes," did you or will you file required Forms 1099? Part Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked No Yes Yes No 1 147,000 > 2 3 4 0 0 147,000 33,500 113,500 0 113,500 5 6 7 18 0 2 Returns and allowances 3 Subtract line 2 from line 1 4 Cost of goods sold (from line 42) 5 Gross profit. Subtract line 4 from line 3 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 7 Gross income. Add lines 5 and 6 Part II Expenses Enter expenses for business use of your home only on line 30. 8 Advertising 8 0 18 Office expense (see instructions) 9 Car and truck expenses (see 19 Pension and profit-sharing plans instructions) 9 0 20 Rent or lease (see instructions): 10 Commissions and fees 10 0 a Vehicles, machinery, and equipment 11 Contract labor (see instructions) 11 0 b Other business property 12 Depletion 12 0 21 Repairs and maintenance 13 Depreciation and section 179 22 Supplies (not included in Part III) expense deduction (not included 23 Taxes and licenses 24 Travel and meals 19 0 20a 20b 21 22 42,000 3,600 X 0 15,000 4,100 23 in Part II (see instructions 13