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Hello. To answer your question, the correct calcualtion for the DPAD deduction is DPGR (6,400,000) less COGS allocable (1,800,000) less direct costs (3,000,000). Therefore, the qualified production activities income is $1,600,000. 9% of this is the DPAD deduction, or 144,000. Keep in mind that the 144,000 is also limited to 50% of W-2 production related wages from the activity. No part of the calculation should be referencing AGI, so it seems your software is performing the calculation incorrectly. Feel free to respond if you have any other questions on this issue. If this completely answers your question, please rate the answer, but do not do so until I have fully answered your question. Thank you.