Q: What form is the manufacturing deduction calculated on?
A: IRS Form 8903 is the appropriate form to calculate and report the manufacturing deduction.
Q: Can the section 179 expenses be carried forward into future years if all of the deduction cannot be used in the current year?
A: Yes, 179 expenses can be carried forward if enough income is not present to be used in the current year.
Q: How broadly does the Domestic Productions Activity Deduction apply?
A: The Domestic Productions Activity Deduction is intended to be liberally interpreted. Activities not traditionally associated with manufacturing qualify for usage of the deduction. With this deduction, if you are in doubt as to whether the deduction applies or not, you are ahead in attempting to take the deduction if it can be reasonably justified.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors