Calculation of qualified business income deduction (LO. 4)

Tom is single and operates a golf store as a sole proprietorship. In 2018, the store has $130,000 of net income. Tom does not itemize and has other income from interest and dividends of $2,000.

What is Tom's QBI deduction for 2018?

$

What is his taxable income?

$

a.Assume the same facts as above, except that Tom is a CPA and operates an accounting firm as a sole proprietorship and his net income is $190,000. In addition, he has capital gains of $3,000.

What is Tom's QBI deduction for 2018?

$

What is his taxable income?

$

b.Assume the facts of the original problem except that Tom has itemized deductions of $25,000 but the QBI from the business is $500,000, W-2 wages are $120,000, and unadjusted depreciable property is $180,000.

What is Tom's QBI deduction for 2018?

$

What is his taxable income?

$