Question
בee=mהeSוסא e Which of the following is a true statement about the QBI deduction? A. It...
בee=mהeSוסא e Which of the following is a true statement about the QBI deduction? A. It cannot come into play for a capital-intensive business B. It cannot come into play for a business that does not pay any W 2wages. C. It cannot be claimed bya service provider such as a doctor, attorney, or CPA. It must be considered in evaluating whether a business should be operated as a pass-through D. entity or as a C corporation.
Answers
Answer -
Step - (1) - Information Given -
Which of the following is a true statement about the QBI deduction?
- Option- (A) - It cannot come into play for a capital-intensive business.
- Option- (B) - It cannot come into play for a business that does not pay any W-2 wages.
- Option- (C) - It cannot be claimed by a service provider such as a doctor, attorney, or CPA.
- Option- (D) - It must be considered in evaluating whether a business should be operated as a pass-through entity or as a C corporation.
.
Step - (2) - Analysis and Conclusion -
The 2017 Tax Cuts and Jobs Act includes a new tax deduction for business owners. It’s called the Qualified Business Income (QBI) deduction.
The QBI deduction is for business owners. It can be up to 20% of qualified business income.
It’s for pass-through businesses (sole proprietors, LLC owners, partners, and S corporation owners) but not for C corporations.
Therefore, Option - (D) - It must be considered in evaluating whether a business should be operated as a pass-through entity or as a C corporation, is Correct.
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