Question 11

Jack owns two motels in New York and travels to Boston to discuss purchasing another motel. Jack incurred the following expenses: $1,000 Travel, $1,000 Accounting fees, and $4,400 Marketing studies.

1. What amount if any can Jack deduct as expenses if he decides not to purchase the motel?

2. What amount if any can Jack deduct as expenses if he decides to purchase the motel?

Question 12

Ellen operates a sole proprietorship that earns $200,000 of qualified business income. The sole proprietorship is not a specified service business. She files a single tax return for 2020. Assume her modified taxable income before the QBI deduction is $175,000.

Ellen's QBI deduction for 2020 is