Page 423 - Large Business IRS Training Guides

FDII - Example 2 - Facts

• Facts in Example 2 are different from Example 1

a domestic corporation that employs dual use
• USP is
to produce two types of income (a building).
property

both deduction eligible income
• The building generates
oil and gas extraction income (DOGEI),
and domestic

not DEI.
which is

• USP
earns $300 of income that qualifies as DEI and
$200 of DOGEI
($500 total income).

• USP is
a calendar year taxpayer and sells the building
on April
30 to an unrelated taxpayer.

Question:
how should USP calculate QBAI?

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