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Thread: Domestic Production Activities Deduction
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Created on: 02/05/10 09:50 AM
Replies: 3
Viewed: 244

Posted by: Michlee
48 posts since - 01/09/2008
Domestic Production Activities Deduction - 2/5/10 at 9:50 AM

Does income from activities related to residential construction qualify for the Domestic Production Activities Deduction by a Sub-S corp?

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Posted by: jainen
2044 posts since - 11/17/2006
limit the DPAD - 2/7/10 at 9:29 AM

>>activities related to residential construction<<

What sort of activities? In my opinion one should distinguish between building houses and, for example, selling them. And in my observation a lot of activity is handled through an S-corp for the express purpose of excluding it from wages, which I feel would correspondingly limit the DPAD.

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Posted by: laurene
24 posts since - 04/16/2009
RE: limit the DPAD - 2/8/10 at 8:45 AM

They build the houses - none of the income is attributable to selling the houses.

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Posted by: jainen
2044 posts since - 11/17/2006
longest topics in Quickfinder - 2/8/10 at 9:09 AM

>>They build the houses<<

That's a start. And do they treat their profits as wages subject to payroll taxes?

In the special case of construction, the company does not have to hold title to the property. Otherwise the rules are the same. But don't accept or assume anything without studying it for yourself--at three pages, DPAD is one of the longest topics in Quickfinder.

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