Red Company Is a Proprietorship Owned by Sally,a Single Individual

question 69

Essay

Red Company is a proprietorship owned by Sally,a single individual.Red manufactures and sells widgets.An examination of Red's records shows the following items for the current year:
Domestic production gross receipts
$2,500,000
Cost of goods sold for domestic products
600,000
Expenses directly related to domestic production gross
receipts (other than wages)
​
280,000
Ratable portion of other expenses
100,000
Other expenses not allocated to domestic production gross receipts
30,000
W-2 wages paid to employees engaged in qualified domestic
production activities
​
270,000
Total W-2 wages
320,000
Sally also had the following additional items:
Dividends received
$ 20,000
Interest income
10,000
​
Determine Sally's domestic production activities deduction for the current year.

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Definitions:

Simple Commands

Basic, straightforward instructions provided to a computer or device that perform immediate actions or operations without complexity.

Months

Time periods that constitute roughly one-twelfth of a year, used in calendars to organize events and activities.

Stomach To Back

A physical maneuver or motion involving the turning or rolling of the body from a position lying on the stomach to one lying on the back.

Months

Units of time in calendars that approximate the period of the lunar cycle, commonly used to measure durations longer than days and shorter than years.