DPAD_examples_solution - TI 900,000 50% W-2 wages 200,000 x...

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Solution : Compute domestic production activities deduction In each of the following independent situations, determine the domestic production activities deduction (DPAD) for 2010. Taxpayer QPAI Taxable income W-2 wages QPAD A 400,000 500,000 20,000 QPAI 400,000 x 9% = 36,000 TI 500,000 50% W-2 wages 20,000 x 50% = 10,000 B 800,000 600,000 120,000 QPAI 800,000 TI 600,000 x 9% = 54,000 50% W-2 wages 120,000 x 50% = 60,000 C 700,000 900,000 200,000 QPAI 700,000 x 9% = 63,000
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Unformatted text preview: TI 900,000 50% W-2 wages 200,000 x 50% =100,000 D* 900,000 900,000 (100,000 ) 800,000 300,000 QPAI 900,000 TI 800,000 x 9% = 72,000 50% W-2 wages 300,000 x 50% = 150,000 E** 900,000 900,000 200,000 50,000 QPAI 900,000 x 9% = 81,000 TI 900,000 (same) 50% W-2 wages 50,000 x 50% = 25,000 * Taxable income does not include a $100,000 NOL carryforward. NOL is subtracted before DPAD. ** Only $50,000 of W-2 wages related directly to manufacturing activities....
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