Question

Complete the following statements regarding the general rules for the QBI deduction and how is it computed. Be specific.
a. The QBI deduction is available to _________ (all/ corporate/ noncorporate) taxpayers. It applies to the qualified business income generated through ________ (all buisness entities/ C and S corporations/ a sole proprietership, a partnership, or an S corporation) .
b. In general, the deduction for qualified business income is the _______ (higher/ lesser) of:
1) __________% of qualified business income, or
2) __________% of modified taxable income.
c. The QBI deduction is a deduction__________ (for/ from) AGI. Further, the deduction is available __________ (only if the standard deduction is used/ only if the taxpayer itemizes deductions/ whether the taxpayer uses the standard deduction or itemizes deductions) .

Answer 1

Answer:

A) - non corporate

- sole proprietorship, a partnership or an S corporation.

B) lesser

1) 20%

2) 20%

C) -from

-whether the taxpayer uses the standard deduction or itemizes deductions.

Explanation:

The QBI deduction is available to noncorporate taxpayers. It applies to the qualified business income generated through a sole proprietership, a partnership, or an S corporation.

b. In general, the deduction for qualified business income is the lesser of:

1) 20% of qualified business income, or

2) 20% of modified taxable income.

c. The QBI deduction is a deduction from AGI. Further, the deduction is available whether the taxpayer uses standard deduction or itemized deductions.