My client is a photographer. He has employees. All income is US. He takes photographs and sells them. He contracts with companies to take pictures for their annual reports. He subcontracts out his skills to other photographers. I assume gross revenues from the first activity qualifies for the domestic production deduction. I think the third activity does not qualify. What about the second?
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No expert
All income US, does that make a difference?? I thought all production had to be U.S. Remember you have to have salaries even if anything is going to count. I heard an agruement from someone who wanted some portion of an advertising agency's income to qualify, but I did not listen well. -
Photographers.....
are not included in sect 199.This post is for discussion purposes only and should be verified with other sources before actual use.
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Question for Bob W
Photographers make pictures. To me these are a product. Do you know of something that specifically excludes photographers?Comment
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Mark.
My understanding of sect 199 is for Manufacturing and Construction. I've read nothing about personal service type business.
Film makers are part of sect 199, with limitations.Last edited by BOB W; 03-03-2006, 04:59 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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Mark, again.
I have read over the inst for form 8903 and there is a line on page 3 first col that says "Tangible personal property" being QPP. This seems very broad in the context of all the other specific catagories included in the instructions that qualify, as well as the specific disqualifing items.
I would like to hear from others that are better versed in this matter than I.......This post is for discussion purposes only and should be verified with other sources before actual use.
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I would tend to think that the photo lab might qualify, but not the photographer.
The photo lab actually manufactures a finished product from raw materials.Comment
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As you no doubt noted the "instructions" aren't very instructing. This is a deduction that is going to take a long time to decide what is what and in the mean time you have to just fly by the seat of your pants. If you determine he is producing a tangible product (pictures) rather than a service it should qualify in all 3 cases. Maybe you should look at how he is billing the customer... is it for pictures or services.Comment
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Makes prints
I apologize, I did not make one thing clear. The photographer in question makes many of his prints in his studio. So maybe prints made in an outside lab would not count and ones he makes in his studio would count.Comment
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