Answer:
$148,000
Explanation:
Data provided in the question:
Net Income generated = $900,000
W–2 wages = $300,000
Total unadjusted basis of property held by ABC = $30,000
Ashley's taxable income before the QBI deduction = $740,000
Now,
1) QBI deduction without any limit = 20% of the net income
= 0.20 × $900,000
= $180,000
2) On applying the two limitation
a) 50% of the W–2 wages
= 50% of $300,000
= $150,000
b) 25% of the W–2 wages + 2.5% of Qualified property
= 0.25 × $300,000 + 0.025 × $30,000
= $75,000 + $750
= $75,750
QBI deduction is greater of the above two (i.e a and b) = $150,000
3) QBI deduction should not be more than 20% of the taxable income
= 0.20 × $740,000
= $148,000
Hence,
Ashley's QBI deduction for 2019 = $148,000
[ As deduction in (1) and (2) is greater than $148,000]
