Section 199 closing of the books method.
The section 199 closing of the books method is not available for tax years beginning on or after March 7, 2008. See
Section 199 closing of the books method on page 9, for more information.
Qualified films.
For tax years beginning after December 31, 2007, the treatment of qualified films under section 199 has been modified
by section 502(c) of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (PL 110-343).
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Section 199 Form W-2 wages include compensation for services performed in the United States by actors, production personnel,
directors, and producers. See Form W-2 Wages on page 7, for more information.
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The definition of a qualified film has been expanded to include the copyrights, trademarks, or other intangibles related to
a film, and new rules apply regarding the distribution of qualified films. See Qualified film on page 4, for more information.
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New rules apply to S corporations, partnerships, S corporation shareholders, and partners engaged in film production. See
Film production under S corporations and partnerships on page 2, for more information.
Activities in Puerto Rico.
The section 199 deduction for certain domestic production activities in Puerto Rico has been extended through tax
years beginning before January 1, 2010, by section 312 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008
(PL 110-343). See
Domestic Production Gross Receipts (DPGR) and
Form W-2 Wages for more information about activities in Puerto Rico.
Oil related qualified production activities.
Section 401 of the Energy Improvement and Extension Act of 2008 (PL 110-343), limits the section 199 deduction of
taxpayers with oil related qualified production activities income for tax years beginning after 2009.
