Page 414 - Large Business IRS Training Guides

Computing FDII and the 250 deduction

STEP 3

– Determine Deemed Intangible Income (DII)
STEP 3

• A domestic corporation’s deemed intangible income for a taxable year
is
the excess of the corporation’s deduction eligible income over the
deemed tangible income return for the taxable year.
corporation’s
these purposes, is a purely a
• Deemed intangible income, as defined for
statutory
creation and will not predictably correlate with intangible assets
owned by
a domestic corporation.
• Instead, like the rest
of the FDII computation, calculating DII is strictly
formula-driven and is
not based on tracing of income attributable to
intangible property.

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