News: domestic activities production deduction

Section 199 Domestic Production Deduction – New IRS Proposed Regulations – Contract Manufacturing

One area of dispute for many years under the Section 199 Domestic Production Activities Deduction was in situations where the taxpayer designs a product but a third party contract manufacturer actually produces the product under contract with the taxpayer. Prior to these new proposed regulations issued in August 2015, the benefits and burdens of ownership tests/criteria would be applied to determine which party can claim the Section 199 deduction.

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Online Software Regs – Section 199 Domestic Production Deduction – Taxpayer must show substantially identical software

Under existing IRS regulations on Section 199, the Domestic Production Deduction, software qualifies for 199 treatment, but online software may or may not depending upon whether certain exceptions are met. As with other qualifying domestic production property under section 199, …

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First Ever Tax Court Case on Section 199 Domestic Production Deduction

In the first Tax Court case opinion on Section 199 deduction activities, the Tax Court today sided with the taxpayer in Gibson & Associates, Inc. v. Commissioner, 136 T.C. No. 10 (February 24, 2011). The taxpayer undertook three types of construction …

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