Assume the same facts as in Problem 37, 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 37. Conrad’s wife, Rachel, earned wages during the year of $354,000, and Conrad and Rachel have 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 Exercises 37

Elliot operates his clothing store as a single member LLC (which he reports as a sole proprietorship). In 2021, his proprietorship generates qualified business income of $280,000, he pays W–2 wages of $170,000, and he has 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 have no other items of income, deduction, or loss, will file jointly, and use the standard deduction. What is Elliot’s qualified business income deduction?