The Department of Health Services contracts for services from this provider and the contract indicates 50 percent of the CEO's activity is allocable
to the contract.
263A-1(e)(3)(i) requires the capitalization of "all indirect costs properly allocable
to property produced or property acquired for resale" and defines costs properly allocable
to property as those "that directly benefit or are incurred by reason of the performance of production or resale activities.
263(a)-5(f) provides detailed rules on the supporting records required from the taxpayer to establish the extent to which costs relating to a covered transaction are allocable
to activities that do not facilitate the transaction and are thus potentially deductible.
The taxpayer must be obligated by the contract or industry custom to repay an allocable
portion if the purchase commitment is not met.
The TIPRA amendments to section 199 narrowed the term "W-2 wages" to include only those amounts properly allocable
to domestic production gross receipts (DPGR), (7) placing an additional burden of determining the portion of W-2 wages that are properly allocable
to DPGR on taxpayers.
199 purposes, that W-2 wages consist only of amounts properly allocable
to domestic production gross receipts--which is used to determine QPAI.
TIPRA modifies the wage limitation so that taxpayers may only include wages that are properly allocable
to domestic production gross receipts.
Reckson reported net income allocable
to common shareholders of $113.
Qualified production activities income equals domestic production gross receipts reduced by the cost of goods sold allocable
to such receipts, other deductions, expenses or losses that are directly allocable
to such receipts, and a proper share of other deductions, expenses, and losses that are not directly allocable
Legislation repealing allocable
share provisions will result in shutting down only small domestic manufacturers.
To establish the amount of its claim, Jay first calculated the portion of its overhead pool allocable
to the COPAR store by multiplying its actual overhead rate by the actual revenue to establish an allocable