Ask Question
24 April, 11:44

Elliot and Conrad (a two-member LLC) operated a consulting firm (a "specified services" business). The business is equally owned and the two are not related. The business generates net income of $280,000, pays W-2 wages of $170,000, and has qualified business property of $140,000. Elliot's wife, Julie, is an attorney who works for a local law firm and receives wages of $90,000. They will file a joint tax return and use the standard deduction of $24,000. Conrad's wife, Jessica, earned wages during the year of $350,000, and Conrad and Jessica have itemized deductions of $62,000 and will file a joint return.

a. What is Elliot's qualified business income deduction?

+5
Answers (1)
  1. 24 April, 14:30
    0
    Elliot's qualified business income deduction is $28,000.

    Explanation:

    total income

    = share in specified service business income + wages of wife

    = 280000*50% + $90000

    = $230,000

    taxable income before QBI = total income - standard deduction

    = $230,000 - $24,000

    = $206,000

    QBI deduction is lesser of:

    - 20% of qualified business income

    = $140,000*20%

    = $28,000

    Therefore, Elliot's qualified business income deduction is $28,000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Elliot and Conrad (a two-member LLC) operated a consulting firm (a "specified services" business). The business is equally owned and the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers