Rob Wriggle operates a small plumbing supplies business as a sole proprietor. In 2019, the plumbing business has gross business income of $421,000 and business expenses of $267,000, including wages paid of $58,000. The business sold some land that had been held for investment generating a long-term capital gain of $15,000. The business has $300,000 of qualified business property in 2019. Rob's wife, Marie, has wage income of $250,000. They jointly sold stocks in 2019 and generated a long-term capital gain of $13,000. Rob and Marie have no dependents and in 2019, they take the standard deduction of $24,400. The income threshold for QBI limitations starts at $321,400 for married filing jointly taxpayers. a. What is Rob and Marie's taxable income before the QBI deduction? b. What is Rob and Marie's QBI? c. What is Rob and Marie's QBI deduction?
Rob Wriggle operates a small plumbing supplies business as a sole proprietor. In 2019, the plumbing business has gross business income of $421,000 and business expenses of $267,000, including wages paid of $58,000. The business sold some land that had been held for investment generating a long-term
The income threshold for QBI limitations starts at $321,400 for married filing jointly taxpayers.
a. What is Rob and Marie's taxable income before the QBI deduction?
b. What is Rob and Marie's QBI?
c. What is Rob and Marie's QBI deduction?
A. What is Rob and Marie's taxable income before the QBI deduction?
| Particulars | Amount ($) |
| Marie's wage income | 250,000 |
| Business income (421,000 - 267,000) | 154,000 |
| Long term capital gain (15,000 + 13,000) | 28,000 |
| Total | 432,000 |
| Less : standard deduction | (24,400) |
| Rob and Marie's taxable income before the QBI deduction | 407,600 |
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