IRC §199A(d) defines a "qualified trade or business" as any trade or business apart from a "specified service trade or business" or a "trade or business of performing services as an employee." Under 26 U.S. Code §1202(e)(3)(A), a "qualified trade or business" are those other than any trade or business which involves "the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services" or any trade wherein the "principal asset" is the skill or reputation of its employees. The term "qualified trade or business" also excludes those that involve performance of services related to "investing and investment management, trading, or dealing in securities, partnership interests, or commodities" (U.S.C. §475(c)(2), (e)(2)).
QBI Deduction Limitations for Qualified Trade or Business …show more content…
As per IRC §199A(b)(6), a "qualified property" a tangible property that is held by and is available for use by a qualified trade or business during the taxable year. In the example below, Taxpayer A has qualified business income of $80,000, $60,000 worth of qualified property, and $0 W-2 wages. The QBI deduction limitation is equal to $1,500 (as calculated