Answer the following questions regarding the qualified business income deduction under 199A.

a. What is the purpose of the qualified business income deduction under 199A?

The qualified business income (QBI) deduction under 199A is designed to yield a ----------- effective tax rate on QBI to ---------- . The deduction ------------ require a corresponding cash payment.

b. How is the deduction calculated?

The partner's deduction is the --------- of the QBI amounts from each trade or business. The deduction, in general, is limited to -------------- of the partner's taxable income ------------ capital gains.

c. What information does the partnership report?

A partnership must report information the partner needs to calculate the deduction limitation, including -------- wages and the unadjusted basis ------------ .

PLEASE FILL IN THE BLANKS.

Drop down choices:

A. )

1. lower or higher

2. partnerships and c corporations, all taxpayers, noncorporate owners of certain pass-through operating businesses

3. does or does not

B)

1. sum or net

2. 10%, 15%, 20%, 25%

3. including or excluding

C)

1.w-2, m-1, or m-3

2. of the partners' property contributions during the year, of the partner's capital account at year-end, of the partnership's depreciable property