Tax Drill - DPAD Affiliate : Taxable Income : Qualified Production Activities In

Question

Tax Drill - DPAD

Affiliate : Taxable Income : Qualified Production Activities Income : W–2 Wages

Parent      $200,000                  $260,000                                           $80,000

SubCo1   $100,000                    $140,000                                          $50,000

SubCo2 $85,000                     $100,000                                           $45,000

What percentage of the group's DPAD is allocated to each affiliate?

Round any division to two decimal places. Enter the percents as whole numbers.

Parent:            %

Sub Co 1:        %

Sub Co 2:       %

Explanation / Answer

The DPAD is generally calculated as a percentage of a taxpayer’s qualified production activities income (QPAI).

Parent : (260000/500000) X 100 = 52%

Sub Co1: (140000/500000) X 100 = 28%

Sub Co3 : (100000/500000) X 100 = 20%

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