Rock Island Corporation generated taxable income $($before the domestic production activities deduction$)$ of

$$10$ million this year. The total income included $$4,500,000$ of qualified production activities income. The

company paid $$500,000$ in $W-2$ wages to generate the qualified production activity income. What is Rock

Island's domestic production activities deduction for the year?

Otto operates a bakery and is on the cash method and calendar year. This year one of Otto's ovens caught fire

and was partially destroyed. Otto bought it a few years ago for $$20,000$ and claimed depreciation of $$12,000$ up

to the fire. Otto was charged $$4,400$ for repairs to the oven but the insurance company paid Otto $$1,500$ for the

damage. What is Otto's casualty loss deduction?

Mike operates a fishing outfitter as an accrual$-$method sole proprietorship. On March $1^{st}$ of this year Mike

received $$15,000$ for three outfitting trips. This is the first time Mike agreed to such a payment and he is

obligated to outfit one trip per year for the next three summers beginning this year. How much income must

Mike recognize in each of the next three years if he is attempting to minimize his tax burden?