Patricia Is a 25% Owner and an Active Member in the PBK

question 41

Multiple Choice

Patricia is a 25% owner and an active member in the PBK LLC, which operates a "qualified trade or business" for purposes of the deduction under § 199A.Patricia's distributive share of "qualified income" from the LLC is $250,000 for the year the LLC's income is $1,000,000) .Her share of the LLC's W-2 wages is $40,000, plus she received a guaranteed payment for services of $30,000.Her share of the LLC's "unadjusted basis immediately after acquisition of qualified property" is $1,200,000.How much is her qualified business income for this separate trade or business?

• A)$20,000.
• B)$35,000.
• C)$40,000.
• D)$47,500.
• E)$50,000.

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Definitions:

Denominator

In a fraction, the number below the line which indicates the total number of parts into which the whole is divided.

Fraction

A mathematical expression representing the division of one quantity by another; it consists of a numerator and a denominator.

Multiply

The mathematical operation of increasing one number by the value of another, a basic arithmetic function symbolized by the symbol “x” or “*”.