QBI Basics
This deduction allows eligible taxpayers to deduct up to 20% of their qualified business income.
What is the Qualified Business Income (QBI) deduction?
This type of business owned by one individual may qualify for the QBI deduction.
What is a sole proprietorship?
This percentage is applied to qualified business income under the QBI component.
What is 20 percent?
This type of income from employment is specifically excluded from QBI.
What is wage income?
A taxpayer has $100,000 of QBI and no limitations apply. What is the deduction?
What is $20,000?
Another name for the QBI deduction is this section of the Internal Revenue Code.
What is Section 199A?
Income earned through this type of corporation is NOT eligible for the QBI deduction.
What is a C corporation?
The overall QBI deduction cannot exceed 20% of this amount.
What is taxable income?
These investment items, including gains and losses, are not included in QBI.
What are capital gains and losses?
A taxpayer has $100,000 of QBI but only $60,000 of taxable income. What limits the deduction?
What is taxable income?
This major tax reform law created the QBI deduction.
What is the Tax Cuts and Jobs Act (TCJA)?
Providing services in this role does NOT qualify for the deduction.
What is being an employee?
The QBI component may be limited by W-2 wages and this property measurement taken immediately after acquisition.
What is the unadjusted basis immediately after acquisition (UBIA)?
Interest income not properly allocable to this does not count toward QBI.
What is a trade or business?
An S corp shareholder receives $50,000 in reasonable compensation and $100,000 in business profit. How much potentially counts as QBI?
What is $100,000?
The QBI deduction is available whether taxpayers itemize deductions or take this alternative.
What is the standard deduction?
These two passthrough entities commonly qualify for QBI treatment.
What are partnerships and S corporations?
This second component equals 20% of qualified REIT dividends and this type of partnership income.
What is publicly traded partnership (PTP) income?
Amounts received as reasonable compensation from this type of corporation are excluded.
What is an S corporation?
A high-income taxpayer owns a law firm. The business is an SSTB. Can they claim the full deduction above the income threshold?
What is no?
The QBI deduction was scheduled to expire after this date.
What is December 31, 2025?
Certain trusts and these legal arrangements may also qualify for the QBI deduction.
What are estates?
Unlike the QBI component, this component is not limited by W-2 wages or UBIA.
What is the REIT/PTP component?
Payments received as guaranteed payments from this type of entity do not qualify as QBI.
What is a partnership?
A taxpayer has $200,000 QBI but only $40,000 in W-2 wages. At high income levels, what may limit the deduction?
What is the W-2 wage limitation?