Ivory, Inc., has taxable income of $600,000 and qualified production activities income (QPAI) of $700,000 in 2012.Ivory's domestic production activities deduction is:

Question

Quizplus · Accepted Answer

The domestic production activities deduction is equal to 9% of the lesser of taxable income or qualified production activities income. In this case, the lesser of taxable income and QPAI is $600,000, so 9% of that amount is $54,000. Therefore, the correct answer is C) $54,000.