Juan recently started operating a flower shop as a proprietorship. In its first year of operations, the shop had a

taxable income of $60,000. Assuming that Juan had no other employment-related earnings,

Question 15 options:

A) 

Juan will be exempt from self-employment taxes for the first three years of operations.

B) 

Juan must pay self-employment tax on the earnings of the business.

C) 

Juan will be exempt from the Medicare tax because the business earnings are below the threshold amount.

D) 

The flower shop must withhold FICA taxes from Juan’s earnings.

A married couple abandoned their principal residence in May. They had purchased the house five years ago for $350,000. The house had a current fair market value of $300,000. What is the maximum loss, if any, that they are allowed to deduct on the current-year’s tax return for the abandoned property?

Question 14 options:

A) $50,000

B) $350,000

C) $0

D) $300,000

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