Question

Grace is single and her share of qualified business income from a partnership is $95,000. Her total taxable income from all sources, before taking the 20% deduction for QBI, is $102,000. What is the amount of the Section 199A qualified business income deduction that Grace can take this year?

Select one:

a. $16,600.

b. $7,000.

c. $19,000.

d. $20,400.

Answer 1

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Correct Answer: Option c. $19,000

Section 199A allows a deduction for up to 20% of QBI(Qualified Business Income) from partnerships, limited liability companies (LLCs), S corporations, trusts, estates, and sole proprietorships. Since the deduction is applicable to qualified business income.

QIB deduction that Grace can take this year = 20% of  Income from a partnership

Substituting the values

QIB deduction that Grace can take this year = 20% X $9,5000

QIB deduction that Grace can take this year = 0.2 X 9,5000

QIB deduction that Grace can take this year = $19,000

Therefore,QIB deduction that Grace can take this year is  $19,000