Sophie Is a 50% Partner in a Glass Company

question 15

Essay

Sophie is a 50% partner in a glass company.She is in the top tax bracket.The partnership has generated $3 million of qualified business income.The partnership paid W-2 wages of $880,000 and owns depreciable tangible property with an unadjusted basis of $1.2 million.What is Saskia's qualified business income deduction (ignoring self-employment taxes)?

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Definitions:

Securities

Tradable financial assets including stocks, bonds, and options, which represent an investment and a means for entities to raise capital.

Sarbanes-Oxley Act

U.S. legislation enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Accounting Standards

Rules and guidelines set by governing bodies that determine how financial transactions and statements are recorded and reported.

Independent Audit Firms

External organizations hired to examine an entity's financial records and statements to ensure accuracy and compliance with accounting standards.