ExpertMedium1 markMultiple Choice
CPA · Question 31 · Area 3: Individual Taxation
A single taxpayer has taxable income of 00,000 (before QBI deduction). Their sole source of income is a law practice (SSTB). The threshold for QBI phase-out is 91,950 and the top of the range is 41,950 (Year 1 inflation adjusted). What is their QBI deduction?
A single taxpayer has taxable income of 00,000 (before QBI deduction). Their sole source of income is a law practice (SSTB). The threshold for QBI phase-out is 91,950 and the top of the range is 41,950 (Year 1 inflation adjusted). What is their QBI deduction?
Answer options:
A.
0,000
B.
0
C.
0,000
D.
0,000
How to approach this question
Identify if SSTB (Law, Health, Accounting, etc.). Check Taxable Income vs Thresholds. If > Upper Limit, SSTB gets NO deduction.
Full Answer
B.0✓ Correct
0
For an SSTB, no QBI deduction is allowed if taxable income exceeds the upper limit of the phase-out range.
Common mistakes
Applying the W-2 wage limitation instead of the SSTB complete disallowance.
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