1- Maria and Javier are the equal partners in MarJa, a partnership that is a qualfied trade or business. In the current year, MarJa had $350,000 of ordinary income after reporting $500,000 in guaranteed payments to Maria and Javier for their services to MarJa ($250,000 each).
a. What is Maria’s and Javier’s qualified business income?
b. How would your answer to part (a) change if MarJa had $550,000 of ordinary income after reporting $300,000 in guaranteed payments to Maria and Javier ($150,000 each)?
2- Thad, a single taxpayer, has taxable income before the QBI deduction of $190,700. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2019, his proprietorship generates qualified business income of $150,000, W–2 wages of $125,000, and $10,000 of qualified property. What is Thad’s qualified business income deduction?
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