For the year 2012, Amber Corporation has taxable income of $880,000, alternative minimum taxable income of $600,000, and qualified production activities income (QPAI) of $640,000. The total W-2 wages paid to employees engaged in qualified domestic production activities are $116,000. Amber's DPAD for 2012 is:

Question

Quizplus · Accepted Answer

The DPAD is calculated as the lesser of 9% of QPAI or 50% of W-2 wages paid to employees engaged in qualified domestic production activities. In this case, the DPAD is the lesser of 9% of $640,000 ($57,600) or 50% of $116,000 ($58,000). Therefore, the DPAD is $57,600.

For the Year 2012, Amber Corporation Has Taxable Income of $880,000