KPMG report - IRS guidance on section 199 benefits, burdens of ownership requirement 

August 20:  Taxpayers who enter into contract manufacturing arrangements with third parties may be able to benefit from the section 199 deduction if they have the “benefits and burdens of ownership” during a qualifying activity.

The IRS Large Business and International (LB&I) exam division recently released a directive providing guidance to exam teams to assist in the determination of which party has the benefits and burdens of ownership.


A KPMG report discusses the directive and provides information for taxpayers to consider when manufacturing activities are undertaken through a contract manufacturing arrangement.


Read an August 2013 report [PDF 109 KB] prepared by KPMG LLP: KPMG’s What’s News in Tax: IRS Issues Guidance on the Section 199 Benefits and Burdens of Ownership Requirement




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