Calculation of qualified business income deduction (LO. 4)

Dan and Katlyn are married and operate a pizza restaurant as an S corporation. In 2018, the store has qualified business income of $300,000. Their itemized deductions are $22,000 and they have other income from interest and dividends of $9,000.

What is their QBI deduction for 2018?

$

What is their taxable income?

$

a.Assume the same facts as above, except that Dan and Katlyn are lawyers and jointly operate their law firm as a partnership. The income that flows to them from the partnership is $380,000. In addition, they have capital gains of $5,000.

What is their QBI deduction for 2018?

$

What is taxable income?

$

b.Assume the facts of the original problem except that their itemized deductions are $32,000, the QBI from the business is $500,000, it has W-2 wages of $160,000, and unadjusted depreciable property of $180,000.

What is their QBI deduction for 2018?

$

What is taxable income?

$