Problem $4-20$ Qualified Business Income $($QBI$)$ Deduction $($LO $4\mathrm{.}11)$ Rob Wriggle operates a small plumbing supplies business as a sole proprietor. In $2023,$ the plumbing business has gross business income of $$421,000$ and business expenses of $$267,000,$ including wages paid of $$58,000.$ The business sold some land that had been held for investment generating a long$-$term capital gain of $$15,000.$ The business has $$300,000$ of qualified business property in $2023.$ Rob's wife, Marie, has wage income of $$250,000.$ They jointly sold stocks in $2023$ and generated a long$-$term capital gain of $$13,000.$ Rob and Marie have no dependents and in $2023,$ they take the standard deduction of $$27,700.$ The income threshold for QBI limitations starts at $$364,200$ for married, filing jointly taxpayers. Question Content Area a$.$ What is Rob and Marie's taxable income before the QBI deduction? $fill in the blank $204$af$7000$f$9$fff$1\_1$ Feedback Area Feedback The QBI deduction is a new deduction for individual taxpayers reporting income from a pass$-$through entity such as a sole proprietorship, partnership, limited liability company, or S corporation. The QBI deduction is available to individual taxpayers as a $$below the line$$ deduction $($after adjusted gross income$)$ and is also available to taxpayers who take the standard deduction. The deduction is generally $20$ percent of a taxpayer's qualified business income $($QBI$)$ from the pass$-$through entity. However, the QBI deduction is subject to a number of limitations and exceptions. Question Content Area b$.$ What is Rob and Marie's QBI? $fill in the blank $17$ef$72$f$6206$efda$\_1$ Feedback Area Feedback Incorrect Question Content Area c$.$ What is Rob and Marie's QBI deduction? $fill in the blank $836$dc$3$fe$001$ff$9$e$\_1$ Feedback Area Feedback Incorrect Question Content Area d$.$ Complete Form $8995-$A to report Rob$$s QBI deduction. Since the $2024$ version was not available, the prior year form included in the textbook is being used. Be sure and use updated income limits on Line $3$ and Line $21($$$364,200$ for married filing joint returns, $$182,100$ for all other returns$).$ Form $8995-$A Department of the Treasury Internal Revenue Service Qualified Business Income Deduction Attach to your tax return. Go to www$.$irs.gov$/$Form$8995$A for instructions and the latest information. OMB No$.1545-22942023$ Attachment Sequence No$.55$A Name$($s$)$ shown on return Rob and Marie Wriggle Your taxpayer identification number Note: You can claim the qualified business income deduction only if you have qualified business income from a qualified trade or business, real estate investment trust dividends, publicly traded partnership income, or a domestic production activities deduction passed through from an agricultural or horticultural cooperative. See instructions. Use this form if your taxable income, before your qualified business income deduction, is above $$182,100($$$364,200$ if married filing jointly$),$ or you$$re a patron of an agricultural or horticultural cooperative. Part I Trade, Business, or Aggregation Information Complete Schedules A$,$ B$,$ and$/$or C $($Form $8995-$A$),$ as applicable, before starting Part I. Attach additional worksheets when needed. See instructions. $1($a$)$ Trade, business, or aggregation name $($b$)$ Check if specified service $($c$)$ Check if aggregation $($d$)$ Taxpayer identification number $($e$)$ Check if patron A Plumbing supply business $$ B $$ C $$ Part II Determine Your Adjusted Qualified Business Income A B C $2$ Qualified business income from the trade, business, or aggregation. See instructions $...........................................2$ fill in the blank $4$cfeb$6015$f$9$d$004\_13$ Multiply line $2$ by $20\%(0\mathrm{.}20).$ If your taxable income is $$182,100$ or less $($$$364,200$ if married filing jointly$),$ skip lines $4$ through $12$ and enter the amount from line $3$ on line $13..............................3$ fill in the blank $4$cfeb$6015$f$9$d$004\_24$ Allocable share of W$-2$ wages from the trade, business, or aggregation $...4$ fill in the blank $4$cfeb$6015$f$9$d$004\_35$ Multiply line $4$ by $50\%(0\mathrm{.}50)...............................5$ fill in the blank $4$cfeb$6015$f$9$d$004\_46$ Multiply line $4$ by $25\%(0\mathrm{.}25)...............................6$ fill in the blank $4$cfeb$6015$f$9$d$004\_57$ Allocable share of the unadjusted basis immediately after acquisition $($UBIA$)$ of all qualified property $.............................7$ fill in the blank $4$cfeb$6015$f$9$d$004\_68$ Multiply line $7$ by $2\mathrm{.}5\%(0\mathrm{.}025).............................8$ fill in the blank $4$cfeb$6015$f$9$d$004\_79$ Add lines $6$ and $8........................................9$ fill in the blank $4$cfeb$6015$f$9$d$004\_810$ Enter the greater of line $5$ or line $9...........................10$ fill in the blank $4$cfeb$6015$f$9$d$004\_911$ W$-2$ wage and UBIA of qualified property limitation$.$ Enter the smaller of line $3$ or line $10.........................................11$ fill in the blank $4$cfeb$6015$f$9$d$004\_1012$ Phased$-$in reduction. Enter the amount from line $26,$ if any $...........12$ fill in the blank $4$cfeb$6015$f$9$d$004\_1113$ Qualified business income deduction before patron reduction. Enter the greater of line $11$ or line $12................................13$ fill in the blank $4$cfeb$6015$f$9$d$004\_1214$ Patron reduction. Enter the amount from Schedule D $($Form $8995-$A$),$ line $6,$ if any. See instructions $.....................................1415$ Qualified business income component. Subtract line $14$ from line $1315$ fill in the blank $4$cfeb$6015$f$9$d$004\_1316$ Total qualified business income component. Add all amounts reported on line