Diana is a 10% owner in an advertising agency named Bright Ideas ("BI" ) (EIN 20-123456/ ). BI is a Subchapter S corporation located at 4700 MM Lane, West Rockport, ME 04865. The company reported ordinary business income for the year of $150,000. Diana received a K-1 from BI reporting her allocation of this business income. Diana acquired the stock several years ago. Her basis in the stock before considering her 2019 income allocation was $92,000. Diana is a passive owner with respect to this entity, and all her investment is at risk. Diana received no distribution from Bl in 2019. Bl is a specified service business for purposes of the Qualified Business Income Deduction, generating $150,000 of Qualified Business Income and paying $50,000 in W-2 wages to its non-shareholder employees. Diana is also a 20% owner in Natural Sunshine, Inc. ("NS") (EIN 24-9876543). NS is a Subchapter S corporation located at 6488 WYWH Dr, Islamorada, FL 33036. The company reported an ordinary business loss for the year of ($80,000). Diana received a K-1 from NS reporting her allocation of this business loss. Diana acquired the stock several years ago. Her basis in the stock before considering her 2019 loss allocation was $45,000. Diana is a passive owner with respect to this entity. NS is not a specified service business for purposes of the Qualified Business Income Deduction

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