Question

melissa self employed accountant. net sch c income of 120000. taxable income was 99522 for the qbi threshold. she will claim depreciation.
to accurately figure the computation must take account the ubia of any property held by business
figure deduction using simple 2 step computation her taxable is below the lower threshold
since she is involved in specified trade she will us multi step process to compute deduction
none of these apply cause not entitled to deduction

Question 20 of 23. Melissa, a single taxpayer, has qualified business income of $150,000. Her business paid Form W-2 wages and holds qualified property. As Melissa's Tax Professional, you determine that her qualified business income deduction will be limited because her taxable income exceeds the lower threshold for her filing status. You will begin figuring the amoun of her deduction by multiplying $150,000, the amount of her qualified business income, by 20%. Your next step is to: O Deduct the lowest threshold, $157,500, from her taxable income. O Determine the greater of 50% of Form W-2 wages paid OR the sum of 25% of Form W-2 wages, plus 2.5% of the UBIA of qualified property held by her business. O Determine the lesser of her qualified business income and 50% of Form W-2 wages paid. O Determine the lesser of her qualified business income and 2.5% of the unadjusted basis of qualified property, Mark for follow up

Answer 1

Answer:

i) The correct answer is:

• Melissa is able to figure deduction using simple 2 step computation her taxable is below the lower threshold.

Explanation:

The accounting profession is included for specified service trade or business .However the taxable income is lower than the threshold ,

in this way ,deduction is lower of 20% of QBI in addition to 20% of REIT profits and PTP income (or)on the other hand, 20% of her taxable income less net capital profit or net capital gain.

In this manner , she needs to follow basic two step procedure to figure the deduction.

ii)

The correct answer is:

Melissa next step is to determine the greater of 50% of Form W-2 wages paid (or) the sum of 25% of Form W-2 wages ,plus 2.5% of the UBIA of qualified property held by her business.