Katie, a single taxpayer, is a shareholder in Engineers One, a civil engineering company. This year, Katies share of net business income from Engineers One is $200,000 (net of the associated for AGI self-employment tax deduction). Assume that Katies allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers Ones qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income and no capital gains or qualified dividends. Her taxable income before the deduction for qualified business income is $400,000.

Required: (a)Calculate Katies deduction for qualified business income. (b)Assume the same facts provided above, except Katies net business income from Engineers One is $400,000 (net of the associated for AGI self-employment tax deduction), and her taxable income before the deduction for qualified business income is $350,000.

Part a Part b Deduction for qualified business income