QUESTION 16:

The TCJA introduced in 2018 brought considerable tax credits to many taxpayers, and in turn, they will pay fewer taxes. Taking into account the TCJA, what is the best definition of the Qualified Business Income (QBI) deduction?

a) QBI is a deduction that can be combined with the Standard Deduction, and it should be itemized. b) QBI allows Sole Proprietors, shareholders in an S-Corporation, partners in a partnership and trust and estates to claim a deduction for up to 20 percent of qualified domestic income from that Sole Proprietorship, S-Corporation, or partnership. c) QBI is a deduction related to domestic income and can only be used by the list of taxpayers authorized by the IRS. d) QBI is a deduction that is only claimed on Form 1040 - U.S. Individual Income Tax Return.

Question 14:

For the 2020 tax year, there is a new statement about NOL.Which of the following statements concerning a Net Operating Loss (NOL) are correct, except for:

a) A Net Operating Loss (NOL) is used to offset income from another tax year. b) In 2020, the default was to carryover 90% of a loss. Copyright A & B Office, Income Tax School, 2021. All Rights Reserved. 7 c) If an NOL is not used up in the carryback years, it is carried forward to the following year. d) Before the 2018 tax year, the longest an NOL could be carried forward was 20 years after the NOL year.