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Renee's modified AGI of 75,000 exceeds QPAI and the 900 deduction is less than 50. What is the value of QPAI?

1) 10,000
2) 9,000
3) 8,000
4) 7,000

User FelixSFD
by
8.4k points

1 Answer

5 votes

Final answer:

Based on the provided tax brackets and the conditions stated in the question, the logical value of Renee's QPAI that fits the scenario and calculations is $7,000.

Step-by-step explanation:

The question asks about the Qualified Production Activities Income (QPAI), so we need to calculate which option given makes sense based on the provided information. Since Renee's modified AGI of $75,000 exceeds her QPAI and the $900 deduction is less than 50, we can interpret this as the QPAI being less than $50,000. Reviewing the provided tax brackets and given QPAI options, the QPAI that is less than $50,000 and when added to $7,500 exceeds $75,000 (which aligns with her AGI) is the option of $7,000. This can be inferred because $7,500 + 25% of the amount over $50,000 would not exceed $75,000 until the amount over is at least $70,000 (which is her total AGI minus the base $7,500). Therefore, $7,000 is the logical value of QPAI that fits the scenario.

Renee's modified AGI of $75,000 exceeds QPAI (Qualified Business Income) and the $900 deduction is less than $50.

We can set up an equation to find the value of QPAI:

$75,000 - QPAI = $900

Solve for QPAI by subtracting $75,000 from both sides of the equation:

QPAI = $74,100

Therefore, the value of QPAI is $74,100.

User Cftarnas
by
7.9k points
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