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Question

What are the Form 8903 reporting requirements if the taxpayer is a member of an expanded affiliated group?

Answer

Per the form instructions, all members of an expanded affiliated group (EAG) are treated as a single corporation for purposes of the DPAD; however, the DPAD is allocated to each member. The reporting member figures the DPAD for all EAG members by completing lines 10 through 16 and lines 18 through 22 of Form 8903 for the group. That member subtracts the portion of the DPAD allocated to the other members of the group on line 24 as a negative number and recalculates its deduction. Other members of the EAG report their allocated share of the EAG's DPAD on line 24 and file a separate Form 8903 with their return.

Related topic: 1120-US: Form 8903 - Domestic production deduction FAQs

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