1. Aaron is the sole shareholder and CEO of ABC, Inc., an S corporation that...
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Accounting
1. Aaron is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Aarons $100,000 salary. In addition to his compensation, ABC pays Aaron dividends of $250,000. What is Aarons qualified business income?
a. $-0-.
b. $100,000.
c. $250,000.
d. $325,000.
2. Jason and Paula are married. They file a joint return for 2020 on which they report taxable income before the QBI deduction of $200,000. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business and neither is a specified services business. Jasons sole proprietorship reports $150,000 of net income, W-2 wages of $45,000, and has qualified property of $50,000. Paulas partnership reports a loss for the year, and her allocable share of the loss is $40,000. The partnership reports no W-2 wages and Paulas share of the partnerships qualified property is $20,000. What is their qualified business income deduction for the year?
a. $-0-.
b. $11,750.
c. $22,000.
d. $30,000.
e. None of these.
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