For the Section 199A 20% tax deduction, profit distributions from partnerships are considered to be qualified business income (QBI). General partners are taxed based on these profit distributions, as well as guaranteed payments. Although the tax code is quite complicated in this area, it is possible to increase one’s QBI by increasing the profit distributions, and by reducing the guaranteed payments.
Do you have questions about your qualified business income? Contact The Royce CPA Firm in Tucson to request an appointment today.