Assume the same facts as in Problem 35, except that the business is a “specified services” business (e.g., a consulting firm) owned equally by Elliot and Conrad (an unrelated individual) in a two-member LLC. Assume that each member’s share of qualified business income, W–2 wages, and qualified business property is one-half of the information provided in Problem 35. Conrad’s wife, Leena, earned wages during the year of $350,000, and Conrad and Leena record itemized deductions of $62,000. 

a. What is Elliot’s qualified business income deduction? 

b. What is Conrad’s qualified business income deduction? 

Data From Problem 35

Elliot operates his clothing store as a single member LLC (which he reports as a sole proprietorship). In 2019, his proprietorship generates qualified business income of $280,000, he pays W–2 wages of $170,000, and the entity owns qualified business property of $140,000. Elliot’s wife, Julie, is an attorney who works for a local law firm and receives wages of $90,000. They will file a joint tax return and use the standard deduction. What is Elliot’s qualified business income deduction?