To determine current E & P,taxable income must be increased for any domestic production activities deduction.

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Quizplus · Accepted Answer

The domestic production activities deduction (DPAD) is a deduction allowed for businesses engaged in certain production activities within the United States. The DPAD reduces taxable income, but for purposes of determining current earnings and profits (E&P) for tax purposes, taxable income must be increased by the amount of the DPAD claimed. This ensures that the tax treatment of the DPAD does not improperly affect a corporation's E&P.

To Determine Current E & P,taxable Income Must Be Increased