I'm lost in the newly released Sec 199a regulations regarding the QBI calculation for a sole shareholder S corporation.
Single taxpayer
Sub S income after shareholder wages $35,000, there are no other wages.
Shareholder wages $50,000.00. Wages are considered reasonable.
No other income.
Is the QBI calculated as $35,000*20% = $7,000.00
or
$35,000 + $50,000 (shareholder wages) * 20% = $17,000.00
On page 115, example 3 indicates it would be a $7,000 deduction, but the example is for a high income taxpayer.
The regulations refer to shareholder wages are not part of the QBI calculation. If the wages are not added back to the Sub S income there is a disparity between entity choice.