Albert owns $100\%$ of A Corporation, Betty is the sole proprietor of B Company, and Cai is the sole proprietor of C Company.

Each business generated $$500,000$ of taxable income and before$-$tax cash flow.

A Corporation and B Company produce a product, but C Company provides accounting services.

A Corporation will distribute $$200,000$ of its after$-$tax income to Albert.

All three owners face a $37\%$ marginal tax rate on ordinary income.

B Company qualifies for the $199$A deduction, but C Company does not because it provides accounting services and its taxable income exceeds the threshold for that deduction.