Dan and Katlyn are married and operate a pizza restaurant as an S corporation. They are not eligible for any additional standard deduction amounts. In 2020, 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.

Hint: No self-employment tax on profits of an S Corporation.

a. What is their QBI deduction for 2020? $fill in the blank ef027bff703005b_1

What is their taxable income? $fill in the blank ef027bff703005b_2

Feedback

Incorrect

b. 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 $385,000. In addition, they have capital gains of $5,000.

Note: If required, round any division due to phaseout to 2 decimal places. For example, if answer is 0.4620, round to 0.46 or 46%.

What is their QBI deduction for 2020? $fill in the blank 4611f4061050f86_1

What is taxable income? $fill in the blank 4611f4061050f86_2

Feedback

Incorrect

c. Assume the facts of the original problem except that their itemized deductions are $32,000, the QBI from the business is $510,000, it has W-2 wages of $160,000, and unadjusted depreciable property of $180,000.

What is their QBI deduction for 2020? $fill in the blank 039a60f9802bff1_1

What is taxable income?