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1.)

Which of the following comments is not correct regarding the QBI deduction?

a) The QBI deduction is available to taxpayers who elect the standard deduction.

b) The W-2 wage limit begins to phase in if the taxpayers taxable income exceeds the threshold amount of $164,900 ($329,800 for a joint return).

c) Taxpayers with taxable income above the lower threshold are subject to limitations based on W-2 wages and/or the unadjusted basis in acquired qualified property.

d) For the most part, the deduction is 21% of a taxpayers QBI from a partnership, S corporation, or sole proprietorship.

2.

John Budd is the sole shareholder of Ral Corp., an accrual-basis taxpayer engaged in wholesaling operations. Rals retained earnings at January 1, 2022, amounted to $1 million. For the year ended December 31, 2022, Rals book income, before federal income tax, was $300,000. Included in the computation of this $300,000 were the following:

Loss on sale of investment in stock of unaffiliated corporation (stock held for 2 years). Ral had no other capital gains or losses.	$(5,000)
Contribution to a recognized, qualified charity. This contribution was authorized by Rals board of directors in December 2022, to be paid on January 31, 2023.	75,000

With regard to Rals contribution to the recognized, qualified charity, Ral:

a) Can elect to carry forward indefinitely any portion of the $75,000 not deducted in 2022 or 2023.

b) Can deduct the entire $75,000 in its 2022 return because Ral reports on the accrual basis.

c) Cannot deduct any portion of the $75,000 in 2022 because the contribution was not paid in 2022.

d) Can elect to deduct in its 2022 return any portion of the $75,000 that does not exceed the deduction ceiling for 2022.

3.

A taxpayer may not claim the Sec. 199A deduction if (s)he has business income from which of the following entities?

a) S corporations.

b) Sole proprietorships.

c) C corporations.

d) Trusts.

4.

Qualified business income (QBI) does not include which of the following?

a) Foreign currency gains.

b) Capital gains or losses.

c) Employee compensation.

d) All of the answers are correct.

Thank you.

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