QBI

Question 1

Calculate the amount of Bob and Sue’s taxable income before the QBI

A single taxpayer with taxable income before the QBI deduction of $241,950 or more (2024) is not eligible for the QBI deduction on income from a specified service trade or business (SSTB).

Answer 1

Income, add W2 wages, bus ordinary income, less itemized deductions.

To determine QBI x .20% ordinary bus income, but if income is $383,900–$483,900 MFJ * W2 wages paid from bus x percentage of partnership and whichever is less is what I use.

Consulting is a specified service trade or business (SSTB). They are not entitled to a QBI deduction on the income.

To calculate overall QBI from all income x total income (w2 + bus ordinary income) * .20%. Also add all the QBI deductions from all bus and whichever is less is what I use as total QBI if total income is $383,900–$483,900 MF

Question 2

Dividends Received Deductions allow for domestic corpo

Answer 2

Percentage ownership DRD
0% to < 20% 50%
20% to < 80% 65%
80% or more 100%

Question 3

Ball and Baig are equal general partners in the firm of Games Associates. On January 1 of the current year, each partner’s basis in their Games partnership interest was $50,000. During the year, Games borrowed $80,000, for which Ball and Baig are personally liable. Games sustained an ordinary business loss of $30,000 for the current year. The basis of each partner’s interest in Games at the end of the current year is

Answer 3

FX: Beg Basic + New basics = Total - Ending basics

Choice “D” is correct. A partner’s basis in his partnership interest is the combination of his capital account and his share of partnership liabilities. Ball and Baig are general partners who have personal liability for partnership recourse debt, so the debt is allocated 50-50 between the two partners. The beginning basis in each partner’s partnership interest of $50,000 should be increased by each partner’s share of the $80,000 increase in partnership liabilities, or $40,000, then decreased by each partner’s share of the $30,000 ordinary business loss, or $15,000. Beginning basis in partnership interest $50,000 + Share of increase in partnership liabilities $40,000 – Share of ordinary business loss 15,000 = Ending basis in partnership interest $75,000.

Question 4

QBI Formula

Answer 4

Add ordinary bus income + salary or guarantee payment + AGI = Itemized deductions or standard

Question 5

QTB or SSTB

Answer 5

SSTB = Law, accounting, actuarial, arts, consulting or financial services
—SSTB 0 deductible

QTB = Any not describe above
–Must do business in the US

Income below $191,950 (s) or $383,900 (MFJ) take 20%

Income above $241,950 (s) or $483,900 (MFJ) QTB - full W2 limit applies??

QBI will be the lesser of the 20% or taxable income (all income from W2 and bus)