Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half

Question

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property. Determine Alexandra's AGI for 2015.

Revenue from auto repairs $145,030 Salaries paid to mechanics 72,320 Supplies and tools 18,610 Revenues from gas station partnership (Alexandra’s share) 126,100 Expenses from gas station partnership (Alexandra’s share) 95,310 Self-employment tax (1/2 is employer’s share) 12,812

Explanation / Answer

Note: All the above expenses are deductible with the exception of half of the self-employment tax

Revenue from auto repairs $145,030 Add : Revenues from gas station partnership (Alexandra’s share) 126,100 Total Revenue $271,130 Less expenses Salaries paid to mechanics 72,320 Supplies and tools 18,610 Expenses from gas station partnership (Alexandra’s share) 95,310 Self-employment tax (1/2 is employer’s share)(12,812/2) 6,406 Total Expenses $192,646 AGI ($271,130 - 192,646) $78,484

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