Question

Tammy, a single taxpayer, has a part-time job at BigCo, a company in which she has no ownership interest. In addition, she owns and operates LittleCote, a sole proprietorship that is a qualified trade or business. Tammy is paid wages of $40,000 by BigCo, and reports $100,000 in qualified business income from Little. She has no other items of income or loss and $25,000 of itemized deductions. Assume the QBI amount is net of the self-employment tax deduction. What is her qualified business income deduction

Answer 1

Qualified business income deduction= $20,000

Step-by-step explanation:

Section 199A of the Internal Revenue Code gives numerous citizens a conclusion to qualified business salary from a certified exchange or business worked straightforwardly or through a go through substance. People, trusts and bequests with qualified business salary, qualified REIT profits or qualified PTP pay may meet all requirements for the finding. QBI is the net measure of qualified things of salary, addition, derivation and shortfall from any certified exchange or business. The reasoning will be % of QBI.

Tammy shall get deduction of 20% of $ 100,000 = $ 20,000