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25 January, 15:05

Maria and Javier are the equal partners in MarJa, a partnership that is a qualifying trade or business. In the current year, MarjJa generated $350,000 of ordinary income after reporting $500,000 in guaranteed payments to Maria and Javier for their services to MarJa ($250,000 each) a. What is Maria's and Javier's qualified business income?

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  1. 25 January, 15:28
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    Answer: The total of $350,000 will be Maria and Javier's qualified business income.

    Explanation:

    The amount of guranteed payments, i. e., $500,000 will not be included in the qualified business income. Therefore, their qualified business income is $350,000. Since they are equal partners, we will divide the $350,000 by 2 which will give us $175,000 for each of them.
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