Roquan, a single taxpayer, is an attorney and practices as a sole proprietor. This year, Roquan had net business income of $90,000 from his law practice (net of the associated for AGI self-employment tax deduction). Assume that Roquan pays $40,000 in wages to his employees, has $10,000 of property (unadjusted basis of equipment he purchased last year), and has no capital gains or qualified dividends. His taxable income before the deduction for qualified business income is $100,000. Required:
Calculate Roquan’s deduction for qualified business income. Assume the same facts as earlier, except Roquan’s taxable income before the deduction for qualified business income is $300,000.
1. Calculate Roquan’s deduction for qualified business income.
2. Assume the same facts as earlier, except Roquan’s taxable income before the deduction for qualified business income is $300,000.

1) $18,000

2) $0

Explanation:

1) The wage based limits in business applies only to taxpayers with taxable income in excess of $157,500 or excess of $315,000, if it is a joint return.

Now, in this case, Roquan's taxable income which is $100,000 is less than the wage limits of $157,500 earlier stated. This implies that it doesn't qualify for wage-based limits.

Therefore, from business practices, Roquan will likely deduct 20% of the net $90,000 which is $18,000 to serve as deduction for qualified business income.

2) We are told that Roquan's taxable income before the deduction for qualified business income is now $300,000. What this implies is that his law practice would be judged to be a trade business and he would therefore not be eligible for deduction of the qualified business income.

Thus, it's $0.

24 years, i believe is the correct answer.

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.