Form 8903 Domestic Production Activities Deduction: What You Need to Know Now

Mastering Complex Determinations, Calculations and Reporting to Maximize DPAD

Recording of a 110-minute CPE webinar with Q&A

Conducted on Wednesday, March 9, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers to businesses with a thorough and practical guide to claiming the Section 199 Domestic Production Activities Deduction (DPAD). The panel will discuss evaluating production activities to determine whether they qualify for the deduction, allocating costs between qualifying and non-qualifying activities, and calculating and claiming the Sec. 199 domestic production activities deduction on Form 8903. The panel will also detail the potential implications of the new IRS guidance on Section 199 deductions issued in Aug. 2015.

Description

DPAD generally provides a deduction of 9% of the lesser of Qualified Production Activities Income (QPAI) or taxable income. Despite being one of the most valuable permanent benefits available, many taxpayers claim (or fail to claim) DPAD with only a limited understanding of Sec. 199.

The deduction is available to business entities and individuals engaged in qualified domestic production activities. The list of activities that qualifies for the deduction is substantial, but there are key exclusions. The IRS issued both temporary and proposed regulations in 2015 that may impact the amount of DPAD available to many industries. Tax advisers must understand the latest IRS guidance to identify client-specific opportunities to optimize DPAD.

Optimizing DPAD often involves a surprisingly large number of decision points and calculations, some of which also may impact the client’s utilization of other tax benefits. Key issues facing advisers include: proper identification of qualified and non-qualified revenue, proper allocation of cost of goods sold in conformity with the Section 199 and 263A regulations, and expense allocation and apportionment under Sections 199 and 861.

Listen as our panel of expert advisers provides a comprehensive guide to identifying DPAD activities, allocating income and costs under the Section 199 rules, and reporting the deduction on Form 8903.

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Outline

  1. Review of DPAD rules and preparation of Form 8903
  2. Identifying DPAD-eligible activities
  3. Discussion of expense allocation and apportionment
  4. What does the new IRS guidance mean for advisers?
  5. 2015 tax legislation impacting Sec. 199

Benefits

The panel will discuss these and other important issues:

  • Understanding vital definitions such as qualified production activities income (QPAI), domestic production gross receipts (DPGR) and qualifying production property
  • Identifying what specific activities qualify for DPAD
  • Calculating cost of goods sold related to DPGR, and identifying allocation and apportionment opportunities

Faculty

John Manning, Esq.
John Manning, Esq.
The DPAD Group

Mr. Manning has over twenty years of broad-based federal tax experience, which includes six years as an attorney...  |  Read More

Dan Steele, CPA
Dan Steele, CPA
The DPAD Group

Mr. Steele's practice focuses extensively on export tax benefits, domestic production activities deductions,...  |  Read More

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