Kelly Operates a Sole Proprietorship with Qualified Business Income of $920,000

question 85

Multiple Choice

Kelly operates a sole proprietorship with qualified business income of $920,000. Her business paid W-2 wages of $250,000 and owns depreciable tangible property with an unadjusted basis of $410,000. Compute Kelly's allowable QBI deduction before the taxable income limitation.

• A) $184,000
• B) $125,000
• C) $72,750
• D) $0

---

Definitions:

Markdown

A reduction from the original or list price of goods or services to stimulate sales.

Rebuilt Engines

Engines that have been disassembled, cleaned, inspected, repaired, and reassembled to working condition.

Operating Costs

Expenses associated with the day-to-day functioning of a business or operating a piece of equipment.

Operating Expenses

The costs associated with running a day-to-day business operation, excluding the cost of goods sold.