What does qualified business income mean on the CPA exam?
Qualified business income. The net income from a domestic pass-through trade or business, excluding investment income and reasonable compensation. The base for the 20 percent deduction.
Defined against Sec. 199A(c).
Which CPA exam sections use qualified business income?
Qualified business income appears in the TCP section of the CPA exam.
Other names for qualified business income
QBI
Related terms
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- net investment income: Interest, dividends, capital gains, rents, royalties and income from passive businesses, less the deductions allocable to them.
- trade or business: An activity carried on regularly, continuously and with a profit motive.
- earned income: Compensation for personal services -- wages, or net earnings from self-employment.
- ordinary income: Income taxed at the regular graduated rates rather than at preferential capital gain rates.
- operating income: Profit from the core business, before interest and tax.