Jay, a Single Taxpayer, Operated a Hardware Store as a Sole

question 56

Multiple Choice

Jay, a single taxpayer, operated a hardware store as a sole proprietorship during 2018. He has the following information:
?
$$\begin{array} { l r } \text { Net Sales from the hardware store } & \$ 300,000 \\\text { Operating Expenses of the hardware store } & 200,000 \\\text { Dividend Income } & 5,000 \\\text { Taxable income before the Qualified Business Income (QBI) deduction } & 90,000\end{array}$$
What is Jay's Qualified Business Income (QBI) deduction?

• A)$- 0 -
• B)$18,000
• C)$20,000
• D)$21,000
• E)$60,000

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Definitions:

Preformation

The historical scientific theory that organisms develop from miniature versions of themselves, rather than from distinct cells or embryos.

Embryo

The early stage of development in multicellular organisms after fertilization, during which the groundwork for all organs and systems is laid.

Prenatal Development

The process of growth and development within the womb from conception to birth.

Fetus

A fetus is a stage in the development of a human or other mammal within the womb, typically after eight weeks of gestation, until birth.