199 deduction

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  • Florida_EA
    Senior Member
    • Aug 2017
    • 153
    #1

    199 deduction

    Client manufactures products overseas and sells them in the US. The only service (design services) work that is done is that of a full time engineer in the US. Salaries allocated to the engineer is 10% of total salaries paid in the US and the salaries of the engineer is allocated to the products. Under Section 199 can some of the sales (10%) be allocated to DPAD?
    Tags: None
    • kathyc2
      Senior Member
      • Feb 2015
      • 1947
      #2
      I don't believe so. For engineering fees to be considered, it needs to be for real property located in US.

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