Jay, a Single Taxpayer, Operated a Hardware Store as a Sole

Jay, a single taxpayer, operated a hardware store as a sole proprietorship during 2018. He has the following information:
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$$\begin{array} { l r } \text { Net Sales from the hardware store } & \$ 300,000 \\\text { Operating Expenses of the hardware store } & 200,000 \\\text { Dividend Income } & 5,000 \\\text { Taxable income before the Qualified Business Income (QBI) deduction } & 90,000\end{array}$$
What is Jay's Qualified Business Income (QBI) deduction?

A) $- 0 -
B) $18,000
C) $20,000
D) $21,000
E) $60,000

Correct Answer:

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