Question 1

Pat's taxable income exceeds $157,500 and thus he is required to phase out his QBI deduction.The phase-out calculation is:
A)The greater of 50% of business wages or 25% of wages plus 2.5% of the unadjusted basis of qualifying property
B)The lesser of 50% of business wages or 25% of wages plus 2.5% of the unadjusted basis of qualifying property
C)50% of taxable income without the QBI deduction
D)50% of the amount over $157,500

Accepted Answer

The phase-out calculation for the QBI deduction is based on the greater of 50% of business wages or 25% of wages plus 2.5% of the unadjusted basis of qualifying property.

Question 2

If Betty generates an NOL in 2018 of $16,000 and taxable income of $18,000 in 2019, what is Betty's NOL deduction in 2019?

Accepted Answer

The answer of If Betty generates an NOL in 2018...

Question 3

The qualified business income deduction is a percentage of wages earned by an employee.

Accepted Answer

The qualified business income deduction is not a percentage of wages earned by an employee. It is a deduction available to certain pass-through businesses, such as sole proprietorships, partnerships, and S corporations, based on their qualified business income. The deduction percentage depends on various factors, such as the type of business and taxable income.

Question 4

In 2018, Keri has wages of $20,000, a Schedule C business loss of $30,000, and nonbusiness capital gains of $4,000.She deducts the standard deduction of $12,000 for a taxable loss of $18,000.Compute Keri's NOL to carry forward to 2018.

Accepted Answer

The answer of In 2018, Keri has wages of $20,000,...

Question 5

Karen was ill for most of the current year.She received tax-free disability income that covered most of her expenses.She paid the deductible expense of owning her home, interest on the mortgage, and property taxes out of this income.Her tax return shows negative taxable income of $25,000.Can this loss be carried forward to future years? Why or why not?

Accepted Answer

The answer of Karen was ill for most of the...

Question 6

Jess has had a couple of good years in his new business and generated large amounts of taxable income.In 2018, however, he has a net operating loss of $8,000.He is uncertain about the future of the business and has a serious cash flow problem.As his tax accountant, how would you recommend Jess treat his net operating loss?

Accepted Answer

The answer of Jess has had a couple of good...

Question 7

The qualified business income deduction is limited to 20% of taxable income not including long-term gains and qualified dividends.

Accepted Answer

The qualified business income deduction is generally limited to 20% of taxable income, excluding long-term capital gains and qualified dividends, as these are not considered part of qualified business income.

Question 8

Gary has qualified business income of $40,000 in 2018.His taxable income without net capital gains is $28,000.Gary's QBI deduction for 2018 is?
A)$0
B)$5,600
C)$8,000
D)$13,600

Accepted Answer

The QBI deduction is the lesser of 20% of qualified business income ($40,000 x 20% = $8,000) or 20% of taxable income without net capital gains ($28,000 x 20% = $5,600). Therefore, the QBI deduction is $5,600.

Question 9

In 2018, Kelly has qualified business income from her Schedule C small business of $178,000.She files jointly with her spouse and their taxable income is $214,000.They have no capital gains or qualified dividends in 2018.If Kelly's business is a service business (e.g., accounting), what is Kelly's 2018 QBI deduction?

Accepted Answer

The answer of In 2018, Kelly has qualified business income...

Quiz 4: Additional Income Part 2

Pat's taxable income exceeds $157,500 and thus he is required to phase out his QBI deduction.The phase-out calculation is:

If Betty generates an NOL in 2018 of $16,000 and taxable income of $18,000 in 2019, what is Betty's NOL deduction in 2019?

The qualified business income deduction is a percentage of wages earned by an employee.

In 2018, Keri has wages of $20,000, a Schedule C business loss of $30,000, and nonbusiness capital gains of $4,000.She deducts the standard deduction of $12,000 for a taxable loss of $18,000.Compute Keri's NOL to carry forward to 2018.

The qualified business income deduction is limited to 20% of taxable income not including long-term gains and qualified dividends.

Gary has qualified business income of $40,000 in 2018.His taxable income without net capital gains is $28,000.Gary's QBI deduction for 2018 is?