Question

I am stuck. I do not understand how to do this. Please help and explain.

During the current year, Marilyn earned $115,000 as an accounting consultant.
requirements:

a. if she has no other income besides a $20,000 capital gain, how much can she claim as a qbi deduction?

b. If she is married and files jointly with her​ husband, who makes $600,000 a year as an​ attorney, how much can she claim as a QBI​ deduction?

Answer 1

a. As per IRS, QBI deduction allowed is 20% of QBI For the purpose of calculating QBI, income from capital gains is not included.

Thus QBI deduction = 20% of $115,000 = $23,000

b. QBI deduction is not allowed for incomes above the threshold limits as mentioned by IRS. The thresholds for claiming QBI deduction for individuals who are married and filing a joint return is $315,000. In given case, the joint income of Marilyn and her husband exceeds the threshold limits hence the wont be allowed a QBI deduction.