Question 1: Stella Watters is a CPA and operates her own accounting firm (Watters CPA LLC). As a single member LLC, Stella reports her accounting firm operations as a sole proprietorship. Stella has QBI from her accounting firm of $540,000, she reports W-2 wages of $156,000, and the unadjusted basis of property used in the LLC is $425,000. Stella is married and will file a joint tax return with her spouse. Their taxable income before the QBI deduction is $475,000, and their modified tax- able income is $448,000. Determine Stella's QBI deduction for 2021.
Question 2: Kyra, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not "specified services" business. In 2021, the business pays $100,000 in W-2 wages, has $150,000 of qualified property, and generates $350,000 of qualified business income. Kyra has no other items of income, deduction, or loss and will take the standard deduction. What is Kyra's qualified business income deduction?