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 2019, 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 2019? $______

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 $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 2019? $_______

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 $510,000, it has W-2 wages of $160,000, and unadjusted depreciable property of $180,000.

What is their QBI deduction for 2019? $______

What is taxable income?

$______