Stacey, Inc., has taxable income of $10 million in 2016. What is the maximum DPAD tax savings for this C corporation?

Question

Quizplus · Accepted Answer

The maximum DPAD tax savings for a C corporation is 3.06% of qualified production activities income (QPAI). QPAI is equal to domestic production gross receipts (DPGR) minus the cost of goods sold (COGS), other expenses, losses, and deductions allocable to such receipts. Assuming Stacey, Inc., has QPAI of $10 million (equal to taxable income), the DPAD tax savings would be 3.06% of $10 million, or $306,000.