1. Jane is single and a self-employed real estate broker. She shows a $100,000 profit on schedule C after deducting $300,000 for employee salaries in 2020. Her taxable income before the QBI deductions is $125,000.

   What is her QBI deduction for 2020?

   	a.	$20,000.
   	b.	$60,000.
   	c.	$-0-.
   	d.	$25,000.
   	e.	$35,000.

1. After his divorce in 2015, Jeff was required to pay $18,000 per year to his former spouse, Darlene, who had custody of their child. Jeffs payments will be reduced to $12,000 per year in the event the child dies or reaches age 21. During the year, Jeff paid the $18,000 required under the divorce agreement. Darlene must include $18,000 in gross income.

   True

   False

1. Jake is the sole shareholder of an S corporation that earned $60,000 in 2020. The corporation was short on cash and therefore distributed only $15,000 to him in 2020. Jake is required to recognize $15,000 of income from the S corporation in 2020 .

   True

   False

2. Jack purchased a building from Jill for $200,000 cash and a mortgage of $500,000. One year after the transaction, it was apparent that Jack would not be able to continue to make the monthly payments on the mortgage. Jill reduced the amount owed by Jack by $100,000. This reduced the monthly payments to a level that Jack could pay. Jack must recognize $100,000 income from the reduction in the debt by Jill.

   True

   False