Question

Tammy has $200,000 of Qot from her neighborhood dothing store ſa sole proprietorship). Her proprietorship Dad $30,000 in W-2 wages and has $20,000 of qualified property. Tammy's spouse earned $50,000 of wages is an employes, and the couple armed 520,000 of interest income during the year and will be filing jointly. What is their t deduction for 20197 a $54,000 b. $50,000 None of these choices are correct.

Answer 1

Answer: $ 40,000 Explanation Tammy and his wife, MF) (Married Filing Jointly) and their *Modified Taxable income is $270,000 which is below of threshold amounts under QBI deduction QBI deduction will be the lower of the following: 20% of Qualified Business Income (QBI) = 200000 *20% = $ 40,000 or 20% of *Modified taxable income = 270000 * 20% = $ 54,000 Qualified Business Income (QBI) Deduction for 2019 is $40,000. Since, QBI is less than Modified taxable income Workings Qualified Business Income (QBI) = $ 200,000 * Modified taxable income = Qualified Business Income (QBI) +Tammy's spouse wages+ Interest Income = $ 200,000 + $50,000 +$ 20,000 = $ 270,000