Jenna Parker owns and manages her single member LLC which provides a wide variety of financial services to her clients. She is married and will file a joint tax return with her spouse, Paul. Her LLC reports $300,000 of net income, W-2 wages of $120,000, and assets with an unadjusted basis of $75,000. Their taxable income before the QBI deduction is $285.000 (this is also their modified taxable income). What is their QBI deduction for 2019?

a. $-0-

b. $57,000.

c. $60,000.

d. $70,000.

Question

Business

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Jenna Parker owns and manages her single member LLC which provides a wide variety of financial services to her clients. She is married and will file a joint tax return with her spouse, Paul. Her LLC reports $300,000 of net income, W-2 wages of $120,000, and assets with an unadjusted basis of $75,000. Their taxable income before the QBI deduction is $285.000 (this is also their modified taxable income). What is their QBI deduction for 2019?

a. $-0-

b. $57,000.

c. $60,000.

d. $70,000.

+3

Answers (1)

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Pedro Best · Answer 1

Option (b) $57,000

Explanation:

Data provided in the question:

Net income = $300,000

W-2 wages = $120,000

Assets with unadjusted basis = $75,000

Taxable income before the QBI deduction = $285,000

Now,

The QBI deduction for 2019 will be given as 20% of the qualified income i. e the taxable income before the QBI deduction

Therefore,

The QBI deduction for 2019 = 20% of $285,000

= 0.20 * $285,000

= $57,000

Hence,

Option (b) $57,000