In the case of an individual, modified AGI is substituted for taxable income in the DPAD formula.

Question

Quizplus · Accepted Answer

Modified AGI (Adjusted Gross Income) is used instead of taxable income in the DPAD (Domestic Production Activities Deduction) formula for an individual taxpayer. This is because the DPAD is intended to encourage domestic production activities, and adjusted gross income more accurately reflects a taxpayer's ability to engage in such activities.

In the Case of an Individual, Modified AGI Is Substituted