Hippo,Inc.,a calendar year C corporation,manufactures golf gloves.For 2008,Hippo had taxable income of $200,000,qualified domestic production activities income of $250,000,and W-2 wages related to qualified production activities income of $23,000.Hippo's domestic production activities deduction for 2008 is:
A)$11,500.
B)$12,000.
C)$15,000.
D)$23,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Hippo's tentative domestic production activities deduction for 2008 is 6% of the lesser of: 11ea7f05_2e4c_f27b_92e1_d1221044971c_TB4123_00 
Although the tentative deduction is $12,000 ($200,000 F1F1F1S1F1F1F10 6%),the wage limitation applies
($23,000 F1F1F1S1F1F1F10 50% = $11,500).Therefore,Hippo's domestic production activities deduction is $11,500.

Hippo,Inc,A Calendar Year C Corporation,manufactures Golf Gloves