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2. Add any amounts reported in

Line 7

Specific Instructions

box 1 of the relevant Forms W-2 that

Estates and trusts must reduce the

are both:

amount reported on line 7 if DNI is

Line 1

a. Wages for federal income tax

distributed or required to be

withholding purposes, and

distributed to beneficiaries. For

Domestic Production

b. Supplemental unemployment

details, see Estates and trusts on

Gross Receipts (DPGR)

compensation benefits.

page 2.

Enter your DPGR (defined on page

3. Subtract (2) from (1).

Line 9

3).

4. Add any amounts reported in

box 12 of the relevant Forms W-2 that

Income Limitation

Estates and trusts. Estates and

are properly coded D, E, F, G, or S.

trusts must reduce this amount if

Individuals. Enter your adjusted

distributable net income (DNI) is

5. Add (3) and (4).

gross income from line 37 of Form

distributed or required to be

1040 figured without the DPAD.

distributed to beneficiaries. For

Figuring Form W-2 wages for tax

details, see Estates and trusts on

Corporations. Enter your taxable

years beginning after May 17, 2006.

page 2.

income from the applicable line of

For tax years beginning after May 17,

your tax return (for example, line 30

2006, Form W-2 wages are generally

of Form 1120) figured without the

Line 2

still figured using one of the three

DPAD.

Allocable Cost of Goods

methods listed on page 5 under

Members of EAGs. See the

Figuring Form W-2 wages for tax

Sold

instructions for line 18 for exceptions.

years beginning before May 18, 2006.

If you are not using the small

However, as discussed on page 5,

Agricultural and horticultural

business simplified overall method,

only wages properly allocable to

cooperatives. Enter your taxable

enter your allocable cost of goods

DPGR are included and the 6% of

income figured without the DPAD or

sold (discussed on page 3).

the deductions for patronage

QPAI limit on Form W-2 wages from

dividends, per-unit retain allocations,

an S corporation, partnership, estate,

Estates and trusts. Estates and

and nonpatronage distributions under

or trust does not apply.

trusts must reduce the amount

section 1382(b) or (c).

reported on line 2 if DNI is distributed

More information. Additional

or required to be distributed to

Estates and trusts. Enter your

guidance discussed below includes

beneficiaries. For details, see Estates

adjusted gross income figured without

rules that apply to short tax years and

and trusts on page 2.

the DPAD. See the Instructions for

the acquisition or disposition of a

Form 1041 to figure adjusted gross

trade or business.

income. Use the method discussed

Line 3

under How to figure AGI for estates

Estates and trusts must use

and trusts, under Line 15b—

For more information on figuring

Regulations section 1.652(b)-3 to

Allowable Miscellaneous Itemized

your Form W-2 wages, see Final

allocate directly allocable trade or

Deductions Subject to the 2% Floor.

Regulations section 1.199-2 or

business deductions or losses

section 4.02 of Notice 2005-14 and

Unrelated business taxable income

between DPGR and non-DPGR.

Proposed Regulations section

(UBTI). An organization taxed on its

Enter the amount allocated to DPGR

1.199-2 as discussed under

UBTI under section 511 enters its

on line 3 after reducing it if DNI is

Additional Guidance on page 1.

UBTI from line 34 of Form 990-T

distributed or required to be

figured without the DPAD.

distributed to beneficiaries. For

details, see Estates and trusts on

For tax years beginning before

page 2.

Line 12

May 18, 2006, also see Rev. Proc.

2006-22. You can find Rev. Proc.

Form W-2 Wages

2006-22 on page 1033 of I.R.B.

Line 4

Enter your Form W-2 wages

2006-23 at

If you are using the small business

(discussed on page 5). Do not include

irb06-23.pdf.

simplified overall method (discussed

Form W-2 wages you must report on

on page 4), enter the amount of cost

line 13.

For tax years beginning after May

of goods sold and other deductions or

17, 2006, also see the temporary

Estates and trusts. Estates and

losses you ratably apportion to

regulations issued in T.D. 9293 and

trusts must reduce this amount if DNI

DPGR.

Rev. Proc. 2006-47. Also see

is distributed or required to be

If you are using the simplified

distributed to beneficiaries. For

Announcement 2006-103 for

deduction method (also discussed on

details, see Estates and trusts on

corrections to T.D. 9293. You can find

page 4), enter the other deductions or

page 2.

T.D. 9293 on page 957 of I.R.B.

losses you ratably apportion to

2006-48 at

DPGR.

Line 13

irb06-48.pdf. You can find

Announcement 2006-103 on page

Estates and trusts. Estates and

Estates and trusts must reduce the

1185 of I.R.B. 2006-52 at

trusts must reduce this amount if DNI

amount reported on line 13 if DNI is

gov/pub/irs-irbs/irb06-52.pdf. You can

is distributed or required to be

distributed or required to be

find Rev. Proc. 2006-47 on page 869

distributed to beneficiaries. For

of I.R.B. 2006-45 at gov/pub/

details, see Estates and trusts on

irs-irbs/irb06-45.pdf.

page 2.

-6-

Instructions for Form 8903

Instructions For Form 8903 - Domestic Production Activities Deduction - Internal Revenue Service - 2006 Page 6

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