Patricia, a single taxpayer, owns and operates an ice cream shop. She does not have any employees and reported qualified business income of $130,000 through a sole proprietorship in 2023. Patricia has AGI of $152,000, including $19,700 of net capital gain, and no itemized deductions, and she claimed the standard deduction of $13,850 on her 2023 Form 1040. Her modified taxable income is $118,450 ($152,000 - $13,850 - $19,700). What is Patricia's QBI deduction? Patricia's QBI deduction $
Patricia, a single taxpayer, owns and operates an ice cream shop. She does not have any employees and reported qualified business income of $130,000 through a sole proprietorship in 2023. Patricia has AGI of $152,000, including $19,700 of net capital gain, and no itemized deductions, and she claimed the standard deduction of $13,850 on her 2023 Form 1040. Her modified taxable income is $118,450 ($152,000 - $13,850 - $19,700). What is Patricia's QBI deduction? Patricia's QBI deduction $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Introduction to QBI:
Qualified Business Income is a tax term used in the United States to refer to the income generated by certain businesses that qualify for a special deduction under the Tax Cuts and Jobs Act (TCJA) of 2017.
This deduction allows eligible taxpayers to deduct a portion of their qualified business income from their taxable income, reducing their overall tax liability. QBI includes income from sole proprietorships, partnerships, S corporations, and certain other pass-through entities.
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