MN Partnership has two equal partners, Mark and Nadia. In the current year, the MN earns $140,000 of ordinary business income and a $30,000 long-term capital gain. Nadia is single. In addition to the partnership items, she reports $40,000 of dividend income and a long-term capital loss of $13,000 from her personal investment accounts. Nadia does not itemize her deductions. Calculate Nadia's 2018
taxable income.
What will be an ideal response?
Combined QBI is $14,000 ($70,000 × 20%). Excess taxable income without regard to the net capital gain is $98,000 ($70,000 + $40,000 - $12,000). The QBI deduction is the lesser of $14,000 or $19,600 ($98,000 × 20%).
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