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Holly files married filing jointly and reports income of $300,000 ($340,000 AGI - $40,000 itemized deductions) before the deduction for qualified business income. She has no capital gains or dividends included in taxable income. Holly's engineering consulting service generates $20,000 of qualified business income. She paid no wages during the current year. What is Holly's deduction for qualified business income

Respuesta :

Answer:

$4,000

Explanation:

The computation of the deduction for qualified business income is shown below:

In this the lower amount should be considered

20% of net income or 20% of qualified business income

20% of $300,000 or 20% of $20,000

So the lower amount is $4,000

hence, the same would be represented as a deduction