Question $39$ of $75.$

Lucien purchased a new computer for his business for $$2,000$ in $2020$ and used the Section $179$ deduction for the full amount. The business$-$use of the computer never dropped below $50\%.$ In $2023,$ he sold the laptop computer for $$800.$ How does he treat this amount?

$$1,200$ recapture of Section $179$ taxed as long$-$term capital gain and $$800$ depreciation recapture taxed as ordinary income. $$2,000$ recapture of Section $179$ taxed as long$-$term capital gain and $$800$ depreciation recapture taxed as ordinary income. $$800$ depreciation recapture taxed as ordinary income.

$$2,000$ recapture of Section $179$ taxed as long$-$term capital gain.

$\frac{2}{15}\frac{?}{24},12$:$52PM$

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Schedules K$-1$

Question $32$ of $75.$

Rosalind takes advantage of the daycare services that her company provides to their employees. The value of the daycare is $$5,000$ per year, of which Rosalind pays $$1,500.$ Rosalind files as head of household on her tax return. How much of the benefit is a taxable fringe benefit to Rosalind and will be reported as income on her Form W$-2?$

$$0$

$$1,500$

$$3,500$

$$5,000$

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Question $33$ of $75.$

Which of the following statements about business entity income is TRUE?

Blair is a shareholder in a C corporation. She owns $55\%$ of the shares and performs services for the company. Her wages will be reported on Form W$-2,$ and her share of the company's ordinary income will be reported to her on Schedule K$-1($Form $1120).$

Estrada is a limited partner who materially participates in the partnership and receives guaranteed payments. The partnership will report her guaranteed payments on Schedule K$-1($Form $1065).$ Estrada's guaranteed paymens will be subject to self$-$employment tax.

Laura is a shareholder in an S corporation. She owns $15\%$ of the shares and will pay self$-$employment tax on her company will report her share of income on Schedule K$-1($Form $1120-$S$),$ Laura ordinary income.

Tanita is a sole proprietor, She may report her business income on Schedule C $($Form $1040)$ or Form $1065.$