Chapter 07 - Deductions And Losses: Certain Business Expenses And Lossese. All of the above are qualified expenditures.ANSWER:
a69. Blue Corporation incurred the following expenses in connection with the development of a new product:Salaries$100,000Utilities18,000Materials25,000Advertising5,000Market survey3,000Depreciation on machine9,000Blue expects to begin selling the product next year. If Blue elects to amortize research and experimental expenditures over60 months, determine the amount of the deduction for research and experimental expenditures for the current year.
a70. Last year, Green Corporation incurred the following expenditures in the development of a new plant process:Salaries$250,000Materials90,000Utilities20,000Quality control testing costs40,000Management study costs5,000Depreciation of equipment18,000During the current year, benefits from the project began being realized in May. If Green Corporation elects a 60 month deferral and amortization period, determine the amount of the deduction for the current year.
b71. Ivory, Inc., has taxable income of $600,000 and qualified production activities income (QPAI) of $700,000 in the current year. Ivory’s domestic production activities deduction is:
c72. In the current year, Amber Corporation has taxable income of $880,000, alternative minimum taxable income of $600,000, and qualified production activities income (QPAI) of $640,000. The total W-2 wages paid to employees engaged in qualified domestic production activities are $116,000. Amber’s DPAD for the current year is: