what they need to do to take the deduction. You ask them if they are talking about the qualified business income deduction, and they reply they do not know.
Mr. and Mrs. Monarch own ‘Monarch Rental’, a disregarded entity (reported on their 1040). Monarch Rentals owns and rents two single-residence houses. The profit from this business was $10,000 for the current tax year.
Mr. and Mrs. Monarch have approached you, their CPA, and stated that they have heard individuals can deduct 20% of their business income on their tax return.
They want to know if individuals can deduct 20% of their business income on their tax return is true, and if so, what they need to do to take the deduction. You ask them if they are talking about the qualified business income deduction, and they reply they do not know.
Which referances can you make to help clarify what they have heard?
Hint:Rev. Proc. 2019-38
Step by step
Solved in 2 steps
