Publisher’s pre-production development activities held not Section 199 manufacturing activities

April 2013


In a recently released Chief Counsel Advice that was issued in response to an IRS Appeals Division request, the IRS concluded that planning and development activities undertaken by a publisher of books and other printed materials (collectively, books) did not constitute a qualifying manufacture, production, growth, or extraction (MPGE) activity for purposes of the Section 199 deduction.  Taxpayers that engage in such activities, and rely on such activities to qualify for Section 199 purposes the gross receipts derived from the disposition of their books, should consider the potential impact of this CCA.

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