Chapter $4$c Qualified Business Income Deduction

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Problem $4-20$

Qualified Business Income $($QBI$)$ Deduction $($LO $4\mathrm{.}11)$

Rob Wriggle operates a small plumbing supplies business as a sole proprietor. In $2023,$ the plumbing business has gross business income of $$421,000$ and business expenses of $$267,000,$ including wages paid of $$58,000.$ The business sold some land that had been held for investment generating a long$-$term capital gain of $$15,000.$ The business has $$300,000$ of qualified business property in $2023.$ Rob's wife, Marie, has wage income of $$250,000.$ They jointly sold stocks in $2023$ and generated a long$-$term capital gain of $$13,000.$ Rob and Marie have no dependents and in $2023,$ they take the standard deduction of $$27,700.$

The income threshold for QBI limitations starts at $$364,200$ for married, filing jointly taxpayers.

a$.$ What is Rob and Marie's taxable income before the QBI deduction

b$.$ What is Rob and Marie's QBI?

c$.$ What is Rob and Marie's QBI deduction?