Paragraph (b) of this section provides rules for determining CGS allocable to DPGR.
Paragraph (c) of this section provides rules for determining the deductions that are properly allocable to DPGR.
Similarly, the adjusted basis of leased or rented property that gives rise to DPGR that has been brought into the United States (as defined in § 1.199-3(h)) without an arm's length transfer price may not be treated as less than its value immediately after it entered the United States.
When an item or service is imported into the United States that had been exported by the taxpayer for further manufacture, the increase in cost may not exceed the difference between the value of the property when exported and the value of the property when imported back into the United States after further manufacture.
If a taxpayer (other than a taxpayer that uses the small business simplified overall method of paragraph (f) of this section) recognizes and reports gross receipts on a Federal income tax return for a taxable year, and incurs CGS related to such gross receipts in a subsequent taxable year, then regardless of whether the gross receipts ultimately qualify as DPGR, the taxpayer must allocate the CGS to - Non-DPGR if the taxpayer identified the related gross receipts as non-DPGR in the prior taxable year or if the taxpayer recognized under the taxpayer's methods of accounting those gross receipts in a taxable year to which section 199 does not apply.