QUALIFIED BUSINESS INCOME (QBI) DEDUCTION:
01.Core Concepts
SECTION 199A • Basics were covered in Chapter 7 (for individual owning only one pass- through entity) • Available regardless of whether the taxpayer selects the standard deduction or itemized deductions • To create parity in tax treatment of pass-through entities versus C corporations • When taxpayer owns more than one qualified business: • First, calculate the deductible QBI for each business, then • Net the above amounts to determine the “Combined QBI” • The deduction is the lesser of: • The Combined QBI, or • 20% of adjusted taxable income (excluding net capital gains)