IRS field advice - Cooperative must compute section 199 deduction separately for patronage, nonpatronage sourced income 

May 3: The IRS today publicly released a field advice memorandum* prepared by the Office of Chief Counsel, concluding that a cooperative cannot compute its domestic production activities deduction (DPAD) under section 199 by aggregating patronage and nonpatronage sourced activities, but must separately compute its DPAD for patronage and nonpatronage sourced income. 20131802F (released May 3, 2013, and dated February 27, 2013)

Read the memo 20131802F [PDF 100 KB]


*Pursuant to section 6110(k)(3), written determinations such as field service advice represent the IRS’s analysis of the law as applied to a taxpayer’s specific facts, and they are not intended to be relied upon by third parties and may not be cited as precedent. They do, however, provide an indication of the IRS’s position on the issues addressed.



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Brett Huston, in Sacramento


(916) 554-1654




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