Instructions For Form 8903 - Domestic Production Activities Deduction - Internal Revenue Service - 2005 Page 7
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7QPAI, and Form W-2 wages of the
deductions, expenses, or losses,
EAG member other than the
consolidated group are aggregated
determined on a consolidated basis.
reporting member. An EAG
with the taxable income or loss,
member other than the reporting
How to Report
QPAI, and Form W-2 wages of the
member does the following.
non-consolidated group members to
All members of an EAG are treated
1. Completes a separate Form
determine the DPAD. For details, see
as a single corporation for purposes
8903, skips lines 1-16, and enters its
section 4.09(4) of Notice 2005-14 and
of determining the DPAD. However,
share of the group deduction on line
Proposed Regulations section
the DPAD is allocated to each
18 as a positive number.
1.199-7(d)(4).
member.
2. Completes lines 17 and 19.
A consolidated group’s DPAD (or
3. Attaches a schedule that shows
EAG reporting member. The EAG
the DPAD allocated to a consolidated
how its QPAI was figured.
member who figures the DPAD for all
group that is a member of an EAG) is
EAG members with the same tax
4. Attaches a copy of the group
allocated to the members of the
year (reporting member) completes
DPAD computation schedule
consolidated group in proportion to
lines 8 through 12 and lines 14
provided by the reporting member.
each member’s QPAI, if any,
through 16 of the Form 8903 for the
regardless of whether the
group.
consolidated group member has:
•
Line 19
Separate taxable income or loss for
The reporting member also does
the tax year, and
the following.
Domestic Production
•
Form W-2 wages for the tax year.
1. Enters the portion of the
Activities Deduction
For purposes of allocating the
deduction allocated to the other
DPAD of a consolidated group among
Combine lines 16 through 18 and
members of the EAG as a negative
its members, if a consolidated group
number on line 18.
enter the result on line 19 and the
member has negative QPAI, the
2. Completes lines 17 and 19.
appropriate line of your tax return.
member’s QPAI is treated as zero.
3. Attaches a schedule showing
Cooperatives. Reduce the amount
how the reporting member figured its
Simplified deduction and small
the cooperative deducts under
business simplified overall
own QPAI.
section 1382 by the portion of the
4. Attaches a schedule that shows
methods. For purposes of applying
cooperative’s DPAD allocated to its
the simplified deduction method and
how the DPAD was figured for the
patrons. However, the entire amount
the small business simplified overall
group and each member’s name,
on line 19, which includes any
method, a consolidated group
EIN, and share of the DPAD.
amount allocated to patrons, is
determines its QPAI by reference to
5. Provides a copy of the group
deductible under section 199 by the
its members’ DPGR, non-DPGR, cost
DPAD computation schedule to the
of goods sold, and all other
other members of the group.
cooperative.
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of
the United States. You are required to give us the information. We need it to ensure that you are complying with these
laws and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally,
tax returns and return information are confidential, as required by section 6103.
The estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and
is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all
other taxpayers who file this form is shown below:
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 hr., 1 min.
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 hr., 6 min.
Preparing, copying, assembling, and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 hr., 46 min.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for the tax return with which this form is filed.
-7-
Instructions for Form 8903
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