Question

Danielle is a partner in and sales manager for DG Partners, a domestic business that is not a specified service trade or business. During the tax year, she receives guaranteed payments of $250,000 from DG Partners for her servicesto the partnership as its sales manager. In addition, her distributive share of DG Partners' ordinary income (its only item of income or loss) was $175,000. What is Danielle's qualified business income?

Answer 1

Answer:

Options include:

a. $-0-.

b. $175,000.  is Correct

c. $250,000.

d. $425,000.

e. None of the above.

Explanation:

Danielle's eligible DG Partners company revenue is $175,000. That's why her assured payments are not classified as QBI.

Qualified business income, QBI, is the total amount of revenue, cost, expense, and loss products attributed to the activity.

Capital losses and gains, distributions, and investment income on cash flow, reserves, and similar accounts are not taken into consideration.

Nonetheless, interest income on receivable accounts or reports is a part of QBI.