Campbell, a single taxpayer, has $95,000 of profits from her general store, which she operates as a sole proprietorship.She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income.How much is Campbell's deduction for qualified business income?

Question

Quizplus · Accepted Answer

The deduction for qualified business income (QBI) is the lesser of 20% of QBI or 20% of taxable income before the QBI deduction. Here, 20% of $50,000 (taxable income) is $10,000, which is less than 20% of $95,000 (QBI), so the deduction is $10,000.

Campbell, a Single Taxpayer, Has $95,000 of Profits from Her