Question

kiyara (single) is a 50 percent shareholder of guardian corporation (an s corporation). kiyara does not do any work for guardian corporation. guardian corporation reported $348,000 of business income for the year (2022). before considering her business income allocation from guardian corporation and the self-employment tax deduction (if any), kiyara's adjusted gross income was $298,000 (all employee salary). kiyara has $42,400 in itemized deductions. answer the following questions for kiyara.
A). Assuming the income allocated to Kiyara is qualified business income, what is Kiyara's deduction for qualified business income? Assume Kiyara's share of wages paid by Guardian Corporation is $62,500 and her share in the unadjusted basis of qualified property used by Guardian was $225,000.

Answer 1

a. Kiyara's Share of income is  50% of $332,000 = $166,000

Max qualified business deduction is = 20% of $166,000 = $33,200

b.Kiyara's Share of income is  50% of $332,000 = $166,000

Net investment income tax liability = $166,000 * 3.8% = $6,308

c.Kiyara does not earn self-employment taxable income from Jazz Corp. as Kiyara does not do any work for Jazz Corp

So Self employment tax liability is 0.

d.Additional medicare tax liability = $282,000 - $200,000 = $82,000 * 0.9% = $738

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