Compute Marla QBI deduction

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Reference no: EM132702966

Problem -

a. Dr. Marla Cratchitt is a single taxpayer and works as cardiologist. Marla is an investor in Salem Healthcare LLC, a business that manufactures stents for a variety of cardiovascular issues. Marla's member's interest in Salem is 20 percent and the LLC agreement calls for guaranteed payments to Marla of $75,000 per year. In 2018, Marla's ordinary business income allocation from Salem is $200,000. Salem also allocated $5,000 of long-term capital gains to Marla. Salem paid wages to employees of $230,000 and has qualified property of $1,200,000. Marla has taxable income of $776,000 for purposes of the QBI limit. Compute Marla's QBI deduction.

b. Assume that same facts as part a. except that Salem is a service business. Compute Marla's QBI deduction.

Reference no: EM132702966

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