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Facts: Ashley Panda is single and has a 20 year old son named Bill. Bill lives with Ashley and she fully supports him. Bill spent 2020 traveling in Asia and was not a student. In 2020 Bill had gross income of $5,780. Ashley owns and operates Panda Enterprises, LLC, a data processing service company. Panda Enterprises cash basis 2020 P&L Statement, generated in QuickBooks accounting software, shows the following: revenues of $340,000, office expense of $66,759, employee salary of $63,000, employee payroll taxes of $4,820, health insurance premiums of $26,000, total legitimate business meal expenses of $3,000, and rent expense of $24,000. There is no depreciation for either book or tax in 2020 because all depreciable equipment owned has been fully depreciated in previous years. The portion of the health insurance premiums paid to cover the employee was $9,600. The portion of the premium paid to cover Ashley was $9,700, and the remainder of the cost was for Bill's coverage. Ashley has an extensive stock portfolio and has prepared the following analysis. Stock # of Shares Date Purchased AA 10 6/22/20 Date Sold Per Share Cost Per Share Selling Price Total Dividends 10/11/20 $ 80 $ 74 $ 30 10/11/20 43 157 120 10/11/20 62 33 65 BB 30 8/5/09 15 12/16/19 Note: Ashley received a Form 1099-B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual cash dividends received in 2020 and are both ordinary dividends (rather than liquidating dividends) and qualified dividends. Ashley received $1,200 of interest income from state of Ohio bonds and $300 of interest income on her First Savings Bank account. She paid $15,000 of alimony to her former husband whom she divorced in 2015, and $35,000 of estimated federal income tax payments for 2020. Ashley itemizes her deductions and had the following items, which may be relevant to her return: Item Amount Notes all for Ashley's visits to her doctors $4,721 3,840 4,330 Unreimbursed medical expenses State income taxes paid Real property taxes on personal residence Interest paid on home mortgage Charitable contributions State sales taxes 8,137 1,372 $200K acquisition loan secured by residence checks paid to Ashley's church amount from IRS sales tax table 619 Gross Income: Gross Income Dividend Income (30+20+65) Interest Income from Savings Account Net long-term capital gain Total Gross Income 170,321 215 300 2.925 173,761 Deductions for AGI: Self-employment tax deduction (10,818) Self-employed health insurance premiu (16,400) Alimony Paid (15,000) Total Deductions for AGI 42,218 Schedule C Revenue Office Expense 66,759 Employee Salary 63,000 Emplpyee Payroll Taxes 4,820 Rent Expense 24,000 Meals & Entertainment Expense Health Insurance premiu 1,500 Ashley Sched C profit x 92.35% (7.65% reduction) x 2.9% medicare tax rate 12.4% SS tax rate x 137,700 Total SE tax x 50% of SE tax 340,000 (66,759) (63,000) (4.820) (24,000) -1,500 (9,600) 170,321 157,291 > $137,700 SS 4,561 threshold 17,075 21,636 10,818 AGI 131,543 Itemized Deductions: Medical Expense (4721 -10% x State Taxes (greater than sales taxes) Estate Income Tax Home Mortgage Interest Charitable Contribution Total Itemized Deductions 0 3,840 4,330 8,137 1,372 17,679 MTI Tl before QBI Ded Less: LTCG Less: QD Total MTI QBI 170,321 (16,400) (10.818) 143, 103 113,864 (2,925) (215) 110,724 Sched C profit Less: SE Ins ded Less: SE tax ded Total QBI Qualified Business Income Deduction: Lesser of MTI or QBI X 20% QBI Deduction 110,724 20% 22,145 Single tax on s Taxable income Less: LTCG Less: qualified dividends TI taxed at ordinary rates 88,579 Tax on Tl taxed at ordinary rates Tl is > $40,000 & $40,000 & $137,700 SS 4,561 threshold 17,075 21,636 10,818 AGI 131,543 Itemized Deductions: Medical Expense (4721 -10% x State Taxes (greater than sales taxes) Estate Income Tax Home Mortgage Interest Charitable Contribution Total Itemized Deductions 0 3,840 4,330 8,137 1,372 17,679 MTI Tl before QBI Ded Less: LTCG Less: QD Total MTI QBI 170,321 (16,400) (10.818) 143, 103 113,864 (2,925) (215) 110,724 Sched C profit Less: SE Ins ded Less: SE tax ded Total QBI Qualified Business Income Deduction: Lesser of MTI or QBI X 20% QBI Deduction 110,724 20% 22,145 Single tax on s Taxable income Less: LTCG Less: qualified dividends TI taxed at ordinary rates 88,579 Tax on Tl taxed at ordinary rates Tl is > $40,000 & $40,000 &