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Unformatted text preview: U.S. production activities Total activities Gross receipts 14,000,000 Domestic production gross receipts (DPGR) 10,000,000 Cost of goods sold (7,000,000) Cost of goods sold related to domestic production (5,200,000) Gross margin 4,800,000 7,000,000 Less: Selling, G&A expenses 4,000,000 (4,000,000) Allocation percentage based on: DPGR/gross receipts ($10/$14) X 71% (2,840,000) Unadjusted net income 1,960,000 3,000,000 +/- Book to tax differences ? ? (A) Taxable income 3,000,000 (B) Qualified production activities income (QPAI) 1,960,000 QPAD = Smaller of (A) or (B) x percentage 1,960,000 QPAD percentage for 2008 X 6% (C) Qualified production activities deduction b-4 W-2 limitation 117,600 W-2 wages allocated to DPGR 4,500,000 50% limitation X 50% (D) W-2 limitation 2,250,000 Domestic production activities deduction smaller of (C) or (D) 117,600...
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This note was uploaded on 03/04/2010 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.
- Fall '08