Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5 million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of depreciation, and $2 million deduction for a net operating loss carryover. c. Suppose that Renee's revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that could be deducted this year under the business interest limitation?
Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5 million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of depreciation, and $2 million deduction for a net operating loss carryover. c. Suppose that Renee's revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that could be deducted this year under the business interest limitation?
Chapter3: Business Income And Expenses
Section: Chapter Questions
Problem 22MCQ
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Required information
[The following information applies to the questions displayed below.]
Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5
million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold
of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of
depreciation, and $2 million deduction for a net operating loss carryover.
c. Suppose that Renee's revenue includes $5 million of business interest income. What is the maximum amount of business interest
expense that could be deducted this year under the business interest limitation?
Note: Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.
X Answer is complete but not entirely correct.
$
4.32 x million
Deductible Business Interest Expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79336414-8aa4-4cd0-bb4a-dc3916c65b8e%2Fb20c36f7-a768-4656-b0a5-b34b9c608757%2Fj251h5c_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Renee operates a proprietorship selling collectibles over the Web. This year, Renee's business reported revenue of $95.5
million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold
of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of
depreciation, and $2 million deduction for a net operating loss carryover.
c. Suppose that Renee's revenue includes $5 million of business interest income. What is the maximum amount of business interest
expense that could be deducted this year under the business interest limitation?
Note: Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.
X Answer is complete but not entirely correct.
$
4.32 x million
Deductible Business Interest Expense
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