Which of the following is a true statement about the domestic production activities deduction?
A) This deduction is determined by the amount of goods manufactured in the United States for export abroad.
B) The deduction is calculated as a percentage of the cost of goods manufactured in the United States.
C) This deduction represents a subsidy to taxpayers who manufacture or construct goods in the United States.
D) The domestic production activities deduction is not affected by the cost of labor.
E) All of the choices are true.

Question

Quizplus · Accepted Answer

The domestic production activities deduction represents a tax subsidy to U.S. taxpayers who produce goods domestically. The deduction is calculated as a percentage of the taxpayer's qualified production activities income or taxable income, whichever is less. It is designed to incentivize domestic manufacturing and production by reducing the tax burden on these activities. The deduction is not based on the actual cost of goods manufactured or the amount of goods exported. The cost of labor may be a factor in determining the deduction amount, as qualified production activities income includes wages paid to employees for domestic manufacturing or production.

Which of the Following Is a True Statement About the Domestic