Question

Beverly, a real estate broker, had the following income and expenses in her business: Commissions income $160,000 Expenses: Criminal charge penalties 6,000 Mortgage interest on the office building 11,000 Property tax on the office 6,000 Supplies 5,000 Lobbying expenses 1,500 Repairs and maintenance 4,000 How much net income must Beverly report from his business

Answer 1

$134,000

Step-by-step explanation:

The computation of net income is shown below:-

Net income = Commissions income - Mortgage interest on the office building - Property tax on the office- Supplies - Repairs and maintenance

= $160,000 - $11,000 - $6,000 - $5,000 - $4,000

= $134,000

Note:- here we will not consider Lobbying expenses and Criminal charge penalties as per section IRC §162(e)