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:

Profitability

A measure of the efficiency and financial performance of a company, often assessed by the ratio of its profits to its revenues.

Generic Strategy

A fundamental strategy a company can adopt to achieve a competitive advantage, typically categorized as cost leadership, differentiation, or focus.

Competitive Pricing

A pricing strategy where a company sets its product prices based on the prices of competitors, aiming to offer more value or lower costs.

Differentiation

A marketing strategy that involves making a product or service stand out from competitors by emphasizing its unique features or benefits.