Real Estate and Construction Newsletter March 2018

How the QBI Deduction Affects Sole Proprietors, S Corps and Partnerships

The new Qualified Business Income (QBI) deduction is an area of tax reform that may affect how some business owners structure their entities. In our January newsletter, we detailed the QBI deduction’s general impact on income from flow-through businesses. Specifically, we discussed how this new deduction puts flow-through businesses on a level playing field with C Corporations. In its simplest form, the QBI deduction is equal to 20% of earned income from sole proprietorships, S corporations and partnerships.

Read two examples of how the QBI deduction will affect entities differently.