Doc is a veterinarian who owns a 25% interest in an LLC that operates a veterinary clinic. Doc’s distributive share of profits from the LLC is $120,000, and she is not entitled to receive any guaranteed payments for her services. Doc’s spouse earns an annual salary of $80,000 as an employee.
(a) Assuming Doc and her spouse file a joint return, do they qualify to take a § 199A deduction and, if so, determine the amount of the deduction.
(b) How does your answer change if Doc’s distributive share of profits is $500,000?
(c) Assume the same facts as (b) above, except that Doc also owns a 25% interest in a limited partnership that leases a commercial facility exclusively to the veterinarian clinic. Will Doc’s distributive share of profits from the real estate partnership qualify for the § 199A deduction? Assume the limited partnership and LLC are owned by the same parties in the same proportions.
Doc is a veterinarian who owns a 25% interest in an LLC that operates a veterinary…
Doc is a veterinarian who owns a 25% interest in an LLC that operates a veterinary clinic. Doc's distributive share of profits from the LLC is $120,000, and she is not entitled to...
