ABC decided to form a limited liability company $($taxed as a partnership$).$ Bob and Rob will each own $50\%$ of the outstanding units, and both will provide services to the LLC as managing members. Bob and Rob will each be pald $$100,000$ annually for those services. During the $2023$ tax year, ABC generated a taxable Income of $$750,000($$$950,000$ less $$200,000$ paid to Bob and Rob for their services$)$ and reported total W$2$ wages paid to employees of $$500,000.$ Assume net taxable income is derived from qualified trade or business activities $($SSTB is not applicable$).$

Questions:

$1)$ How much self$-$employment tax will Bob and Rob owe for $2023?$

$2)$ Pursuant to Section $199$A$,$ what would Bob and Rob be able to claim as QBI Deduction for $2023?$

Answer rating: 100% (QA)

To answer the questions lets break down each part step by step 1 SelfEmployment Tax for Bob and Rob ... View the full answer