Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert's $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000. a.  What is Robert's qualified business income? $ b.  What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $200,000?

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
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Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert's $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000.

a.  What is Robert's qualified business income?
$

b.  What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $200,000?
$

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