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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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, and I am looking regarding Form 8903. Everything we

Customer Question

Customer: Hi,
JA: Thanks. Can you give me any more details about your issue?
Customer: My name is ***** ***** I am looking for information regarding Form 8903. Everything we sale we manufacturer in the US. Does this mean that I would disclose all income including shipping and deduct all costs including selling and admin costs?
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Domestic Production Gross Receipts (DPGR) is defined in instructions - see page 3

https://www.irs.gov/pub/irs-pdf/i8903.pdf

Here is a list what is included and what is NOT included into Gross receipts.
As we see - Total sales (net of returns and allowances) is included.

There is NO specific exclusion for shipping costs as long as that payment is related to the Qualified Production Activity.

Correspondingly - on that form we need to report COGS and deductions related to same activities. So if you are using a third party vendor for shipping - that cost would be deducted.

Customer: replied 1 year ago.
basically if all of our activities are QPA then on form 8903 line 12 that number should equal my net income correct?
Expert:  Lev replied 1 year ago.

Yes - correct.

Expert:  Lev replied 1 year ago.

- and the credit will be calculated based on NET income from qualified activities.

But if ALL activities are qualified - that would be the same as All income.

.

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