Stacey, Inc., has taxable income of $10 million in 2014. What is the maximum DPAD tax savings for this C corporation?

Question

Quizplus · Accepted Answer

DPAD tax savings (if applicable) is calculated as 9% of the lesser of qualified production activities income (QPAI) or taxable income. In this case, we do not know the QPAI, but we know that the taxable income is $10 million. Therefore, the maximum DPAD tax savings would be $306,000 (9% of $10 million).