1120-US: Input is needed for oil-related production activities (FAQ)

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Question

What input is needed when the S Corporation has oil-related production activities?

Answer

If the S Corporation is using the small business simplified overall method to calculate QPAI (code 1 is entered in the Allocation method field), you must enter an amount in the Domestic production gross receipts field in the Oil Related Production Activities section in Screen 8903S.

If the S Corporation is using the simplified deduction method to calculate QPAI (code 2 is entered in the Allocation method field), you must enter an amount in the Domestic production gross receipts and Cost of goods sold allocable to DPGR fields in the Oil Related Production Activities section in Screen 8903S.

If the S Corporation is not calculating the QPAI at the entity level (code 3 is entered in the Allocation method field), you must enter amounts in all the fields in the Oil Related Production Activities section in Screen 8903S.

Related topic: 1120-US: Domestic production information for S Corporations FAQs

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