Don't Think DPAD Applies to Your Company? Think Again.

In May 2006, the IRS issued regulations on the Domestic Production Activities Deduction (DPAD) a corporate tax deduction that could reduce your company's tax burden, expand profits, and increase cash flow.

To help you get a handle on this important deduction, CFMA has published A CFMA Special Report: DPAD Regulations Finalized, Parts 1 and Parts 2 by Rich Shavell, CPA, CCIFP.

This two-part series in the September/October and November/December 2006 issues of CFMA Building Profits (written specifically for contractors, developers, architects, and engineers) explains:

• How DPAD can significantly reduce a contractors tax burden
• What construction activities qualify
• How to take advantage of the safe harbors and de minimis exceptions that apply to construction
• Sample calculations

In addition, these two special reports include summaries of rules for pass-through entities, expanded affiliated groups, and contractors who provide architectural and engineering services.

Whether you're a controller, CFM, or construction company advisory, you should pay close attention to these two special reports.  Why?  Because they provide a strong foundation for an evolving tax deduction that will affect construction long into the future.

*Source: CFMA Building Profits, Construction Financial Management Association, Princeton, NJ, www.cfma.org