Self-Study Problem 4.10

Select whether the following taxpayers are eligible for the QBI deduction "Yes" or "No" and the deduction amount. If an answer is zero, enter "0".

Taxpayer		Yes or No	QBI deduction amount
1.	Aretha is a married taxpayer filing jointly and a shareholder in Soul Corporation (not an S corporation). She owns 10% of the outstanding stock and the corporation generates $700,000 of taxable income from its business operations and distributes a $70,000 dividend to Aretha. Her total taxable income before the QBI deduction is $92,000.		$
2.	Barbara is a single taxpayer and sole proprietor that operates a small chain of hair salons that specialize in obscure hair colors. Her business has no employees since all the stylists operate as independent contractors. Barbara's business generated business income of $120,000 in 2018. Her taxable income before any QBI deduction is $132,500.		$
3.	Cathy is married and files a joint return with her spouse. Cathy operates a small family restaurant as a sole proprietor. She pays wages of $70,000 and the QBI from the restaurant is $100,000. Cathy's spouse has wages of $250,000 and their joint taxable income is $364,000.		$
4.	Dorothy is an owner-employee in an engineering services firm that is organized as an S corporation. Her share of QBI income is $40,000 and her share of S corporation wages is $24,000. Dorothy also won the lottery in 2018 and her taxable income is $200,000. Her filing status is single.