qualified production activities income
(A)The term “qualified production activities income” for any taxable year means an amount equal to the excess (if any) of— (i)the taxpayer’s domestic production gross receipts for such taxable year, over (ii)the sum of— (I)the cost of goods sold that are allocable to such receipts, and (II)other expenses, losses, or deductions (other than the deduction allowed under this subsection), which are properly allocable to such receipts. (B)The Secretary shall prescribe rules for the proper allocation of items described in subparagraph (A) for purposes of determining qualified production activities income. Such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic production gross receipts. (C) (i)For purposes of determining costs under subclause (I) of subparagraph (A)(ii), any item or service brought into the United States shall be treated as acquired by purchase, and its cost shall be treated as not less than its value immediately after it entered the United States. A similar rule shall apply in determining the adjusted basis of leased or rented property where the lease or rental gives rise to domestic production gross receipts. (ii)In the case of any property described in clause (i) that had been exported by the taxpayer for further manufacture, the increase in cost or adjusted basis under clause (i) shall not exceed the difference between the value of the property when exported and the value of the property when brought back into the United States after the further manufacture. (D)