Question

Jackson who is single is a farmer and files schedule F for 2018. He had a net profit from the farm of $96,550. After other income and adjustments , Jackson's taxable is $147,966. What is Jackson's QBI deductions?

$0, he is not eligible for the QBI deduction

$10,283: 20% of the difference between his taxable income and his farm profit.

$19,310; 20% of his farm profit.

$29,593, 20$ of his taxable income

Answer 1

for single filers, the QBI deduction is available for 20% of the business income provided that the taxable income dosen't exceed $157,500

in the given case, the taxable income is $147,996 i.e. less than $157,500

so he is eligible for QBI deduction

QBI deduction = 20% * business income

QBI deduction = 20% * $96,550

QBI deduction = $19,310

hence, the correct answer is C) $19,310; 20% of his farm profit.

In case you have any query, kindly ask in comments.

In case you have any query, kindly ask in comments.