Jason and Paula Are Married

question 61

Multiple Choice

Jason and Paula are married. They file a joint return for 2019 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. Jason's sole proprietorship reports $150,000 of net income, W-2 wages of $45,000, and has qualified property of $50,000. Paula's 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 Paula's share of the partnership's 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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Definitions:

Thrusting

A geological process where one part of the Earth's crust is pushed up over another at a low angle, often associated with mountain building.

Tectonic Terrane

A fragment of crustal material formed on, or broken off from one tectonic plate and accreted or sutured to crust lying on another plate.

Continental Crust

The thick part of the Earth's crust that forms the continents, characterized by its buoyancy and primarily granitic composition.

Passive Margin

A type of continental margin that is not an active plate boundary, characterized by little volcanic and earthquake activity.