Tax Research Project Case A Betsy Babington participated in the Great British Bake Off and won first prize, after which she became a celebrity baker, the most famous in the world. She moved to the U.S., became a U.S. citizen, and then used her celebrity status to start her own bakery called British Babingtons Bakery in downtown Fairfax, VA where she makes tasty treats for local Brits and non-British GMU students who just want a delicious piece of heaven after their grueling tax class is finally over. She operates her bakery as an LLC and includes her $1,000,000 bakery income on her personal tax return as income from a disregarded entity. In addition to her bakery income, Betsy receives large endorsement fees of $500,000 due to her skill and reputation as a baker. These fees are for the use of her name on a line of cooking utensils and cookware. She was ecstatic when she heard about TCJAs Qualified Business Income Deduction of 20%!!! However, her excitement was short lived because she knows the principal reason her business thrives is because of her reputation as a celebrity on the British Baking Show. She heard that high-paid celebrities are disqualified from taking the QBI deduction because they are categorized as a Specified Service Trade or Business (SSTB). She has come to you and asked whether her just her $1,000,000 bakery income is an SSTB, just her $500,000 endorsement income is an SSTB, or the entire $1,500,000 is an SSTB. Take a position on this Question: Which of Betsys income meets the definition of Specified Service Trade or Business, 1) just the $1,000,000 bakery income, 2) just the $500,000 endorsement income, or 3) the entire $1,500,000 income? Primary Authority: State the Primary Authority supporting your conclusion. Your Logic Supporting your Conclusion: State the logic you used in coming up with your conclusion, be sure to show you put thoughtful consideration into determining your position