What amount will Irene need to pay for self-employment tax? $3,861 $4,214 $5,698 $6,263
Please explain clearly if possible, thanks
Business Income and Expenses Irene had the following income from her business during the year: Details about Irene's cost of goods sold (COGS) and her expenses are shown below. This information has been pre-entered for you in BlockWorks. Business Assets Information about Irene's business assets is shown below. The details relating to her vehicle and business mileage have been pre-entered in the BlockWorks Asset Manager. Since Irene did not sell her vehicle, you will not need to make any entries reporting the disposition of this asset. Information about the shop furniture and fixtures has also been pre-entered, although you will need to make the necessary entries to report the disposition of these assets. \begin{tabular}{|l|l|l|l|l|} \hline Depreciable Assets & \multicolumn{3}{|l|}{} \\ \hline Item & Placed in Service & Cost & PriorBonus & Prior Depreciation \\ \hline ShopFurnitureandFixtures & June 1, 2018 & $4,150 & $4,150 & N/A \\ \hline \multirow{5}{*}{ Vehicle } & Notes About Business Use of Vehicle \\ \cline { 2 - 4 } & Ireneusedherpersonalvehicleforbusinesspurposes.Sheownsa2017ToyotaRAV4,whichshepurchasednewonSeptember10,2017,for$27,000.Shestartedusingthevehicleinherbusinessimmediatelyafterpurchasingit.Shehasalwaysusedthestandardmileagerate,andshewillusethisagainfor2022.During2022,shedrove1,457milesforbusinessand943commutingmiles.Shealsodrove10,000personalmiles.Irenekeptdetailedrecordsofherbusinesstrips,andherrecordsnotethat875ofherbusinessmileswereincurredfromJanuary1,2022,throughJune30,2022.Theremaining582mileswereincurredfromJuly1,2022,throughSeptember30,2022. \\ \hline \end{tabular} Irene sold her business assets in a single transaction on September 30,2022 , to the Peerson Creek Soap Company, an S corporation. Make the necessary entries to report the sale of inventory, the sale of the furniture and fixtures, and the goodwill. You will also need to prepare Form 8594 , Asset Acquisition Statement, to show the allocation of the sales price. The total business sales price of $30,000 is allocated as follows: The EIN for the Peerson Creek Soap Company is 07-0000806. Their business address is 302 Mill Street, Your City, YS XXXXX. For the purpose of simplicity, there are no expenses associated with this sale. The buyer and seller provided an allocation of sales price in the sales contract. The aggregate fair market values listed for each asset class are the amounts agreed upon in the sales contract. The sales agreement did not include a license or covenant not to compete. Business Income and Expenses Irene had the following income from her business during the year: Details about Irene's cost of goods sold (COGS) and her expenses are shown below. This information has been pre-entered for you in BlockWorks. Business Assets Information about Irene's business assets is shown below. The details relating to her vehicle and business mileage have been pre-entered in the BlockWorks Asset Manager. Since Irene did not sell her vehicle, you will not need to make any entries reporting the disposition of this asset. Information about the shop furniture and fixtures has also been pre-entered, although you will need to make the necessary entries to report the disposition of these assets. \begin{tabular}{|l|l|l|l|l|} \hline Depreciable Assets & \multicolumn{3}{|l|}{} \\ \hline Item & Placed in Service & Cost & PriorBonus & Prior Depreciation \\ \hline ShopFurnitureandFixtures & June 1, 2018 & $4,150 & $4,150 & N/A \\ \hline \multirow{5}{*}{ Vehicle } & Notes About Business Use of Vehicle \\ \cline { 2 - 4 } & Ireneusedherpersonalvehicleforbusinesspurposes.Sheownsa2017ToyotaRAV4,whichshepurchasednewonSeptember10,2017,for$27,000.Shestartedusingthevehicleinherbusinessimmediatelyafterpurchasingit.Shehasalwaysusedthestandardmileagerate,andshewillusethisagainfor2022.During2022,shedrove1,457milesforbusinessand943commutingmiles.Shealsodrove10,000personalmiles.Irenekeptdetailedrecordsofherbusinesstrips,andherrecordsnotethat875ofherbusinessmileswereincurredfromJanuary1,2022,throughJune30,2022.Theremaining582mileswereincurredfromJuly1,2022,throughSeptember30,2022. \\ \hline \end{tabular} Irene sold her business assets in a single transaction on September 30,2022 , to the Peerson Creek Soap Company, an S corporation. Make the necessary entries to report the sale of inventory, the sale of the furniture and fixtures, and the goodwill. You will also need to prepare Form 8594 , Asset Acquisition Statement, to show the allocation of the sales price. The total business sales price of $30,000 is allocated as follows: The EIN for the Peerson Creek Soap Company is 07-0000806. Their business address is 302 Mill Street, Your City, YS XXXXX. For the purpose of simplicity, there are no expenses associated with this sale. The buyer and seller provided an allocation of sales price in the sales contract. The aggregate fair market values listed for each asset class are the amounts agreed upon in the sales contract. The sales agreement did not include a license or covenant not to compete
