IF YOU MAKE A PRODUCT IN THE U.S. YOU MAY BE ABLE TO SAVE ON YOUR TAXES.

Form 8903 Domestic Produciton Activities Deduction (DPAD) is for those businessess that make a product in the United States and Puerto Rico.  It is available to individuals, corporations, cooperatives, estates, and trusts.  For those businesses that are pass through entities such as partnerships and S corporations the partners or shareholders take the deduction on their personal tax returns.

The DPAD is not just for oil and gas companies any individual or entity can qualify as long as it has Qualified Produciton Activities Income (QPAI).

Domestic Produciton Gross Recipts (DPGR) is
  1. Construction of real property you build in the united States in your construction trade or business.
  2. Engineering or Architectural services trade or business for the construction of real property in the United States. Any lease, rental, license, sale, exchange, or other disposition of the following.
a. Qualifying produciton property you manufacture, produce, grow or extract in whole or in significant part in the Unitd States.  Qualifying Production Property is Tangible personal perperty, Computer software, Sound recordings (there are limitations and exclusions please see the instructions for form 8903 at IRS.GOV).
    3.   Any qualified film you produce.
    4.   Electricity, natural gas, or potable water you produce in the United States.

What is not considered DPGR is:
    1.   Activities not attributable to the actual conduct of a trade or business.
    2.   The sale of food and beverages you prepare at a retail establishment.
    3.   The lease, rental, or license of property between certain persons treated as a single employer.
    4.   The lease, rental, license, sale, exchange, or other disposition of land.
    5.   The transmission or distribution of electricity, natural gas, or potable water.
    6.   Advertising and product-placement; however, see Regulations section 1.199-3(i)(5)(ii) for exceptions.
Customer and technical support, telephone and othertelecommunications services, online services (including internet access services, online banking services, providing access to online electronic books, newspapers, and journals).  See Regulations section 1.199-3(i)(6)(iii) for exceptions.

Comments

  1. TaxseerNovember 1, 2019 at 11:51 PM

    Thanks again for all the great information…I am grateful! 1099 C Form Online. You can clearly explain about it.

    ReplyDelete

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