Map,Inc. ,has taxable income of $13 million in 2012.What is the maximum DPAD tax savings for this C corporation?

Question

Quizplus · Accepted Answer

The maximum DPAD tax savings for a C corporation is 9% of the qualified production activities income (QPAI). To calculate QPAI, you need to subtract the cost of goods sold, direct labor, and other expenses from gross receipts. Assuming Map, Inc. has QPAI of $12 million (since $13 million is taxable income and the DPAD is only available on domestic production income), the maximum DPAD tax savings would be $409,500 (9% of $12 million).

Map,Inc ,Has Taxable Income of $13 Million in 2012