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Domestic Production Deduction Doubles In 2007

The domestic production deduction for income from qualifying activities has doubled to 6% for 2007. Many of our clients have activities that change from year to year, especially costs related to producing certain products. As a reminder, qualifying activities generally include the following if performed within the United States:

• The manufacture, production, growth or extraction of qualified production property in whole or in significant part by the taxpayer
• The production of a qualified film
• The production of electricity, natural gas or potable water
• Construction activities
• Engineering or architectural services performed for construction projects in the United States

Please note that a business might qualify for a deduction even if a portion of its operations meet the "qualifying activities" noted above. The deduction would be limited only to those activities but might still be a worthwhile deduction.

To discuss the applicability of the domestic production deduction to your business contact Mike Calahan at 312-980-2996 or your Blackman Kallick representative.

For more information, read these related articles:
New Rules Clarify, Modify the Domestic Production Deduction
Domestic Production FAQ
How you can benefit from the new domestic production deduction

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.