Raj is a 50% shareholder in an S corporation.In the current year,he is reporting $50,000 of salary,$2,000 of interest income,$20,000 of qualified business income from the S corporation and $10,000 of long-term capital gain.Raj's taxable income before the qualified business income deduction is $65,000.Raj will be allowed a QBI deduction of
A)$20,000.
B)$4,000.
C)$11,000.
D)$13,000.

Question

Quizplus · Accepted Answer

The QBI deduction is generally 20% of qualified business income. Raj's QBI is $20,000, so the deduction is 20% of $20,000, which is $4,000.

Raj Is a 50% Shareholder in an S Corporation