Question

Glen owns and manages a single member LLC that provides financial consulting to his clients. He is married and will file a joint return with his wife Diane. HI LLC has net income of $290,000. The LLC pays out W-2 wages of $100,000 and has with an unadjusted basis of $50,000. Glen and Diane's taxable income before the QBI deduction is $305,000, this is also modified taxable income. Determine the QBI deduction for 2018.

Answer 1

Answer:

As Glen owns and manages a LLC (Limited Liability Company).

Total taxable income from all sources deductions, including standard deduction

Glen file a joint return with his wife Diane (for 2018 married couples standard deduction is $24000).

Net Amount = $290000

QBI deduction = $305000

W-2 wages = $100000

Assets with an unadjusted basis = $50000

Max possible pass through deduction = 20% * 305000

= $61000

The income is not over $415000. Glen do not qualify for the deduction of W-2 wages.

so we will get $61000 QBI.