Tammy has $200,000 of QBI from her neighborhood clothing store (a sole proprietorship).Tammy's proprietorship paid $30,000 in W-2 wages and has $20,000 of qualified property.Tammy's spouse earned $50,000 of wages as an employee, they earned $20,000 of interest income during the year, and will be filing jointly.What is their QBI deduction for 2018?

Question

Quizplus · Accepted Answer

The QBI deduction is 20% of the qualified business income. Tammy's QBI is $200,000, so the deduction is 20% of $200,000, which equals $40,000. The wage and property limitations do not apply because their total taxable income is below the threshold for 2018.

Tammy Has $200,000 of QBI from Her Neighborhood Clothing Store