Question
Sarah owns and operates a retail sporting goods business as a sole proprietor. Her store is located on the ground floor of a two-story building
Sarah owns and operates a retail sporting goods business as a sole proprietor. Her store is located on the ground floor of a two-story building that she owns. Based on the following information regarding 2016, compute her net self-employment income (for SE tax purposes) to be put onto Schedule C for that year. Gross profit from sporting goods business $100,000; Rental income from upper level (45%) of building 20,000; Building depreciation expense 10,000; Utilities for ground floor (Tenant pays own utilities.) 4,500; Depreciation on vehicles used in business 3,000; Gain on sale of van used 100% in business 2,000; Contributions to her Keogh retirement plan 5,500; Sarahs health insurance premiums 4,000; Mortgage interest on building 10,000; Other expenses 11,500
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