[Federal Register Volume 84, Number 74 (Wednesday, April 17, 2019)]
[Rules and Regulations]
[Pages 15954-15955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07652]


-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9847]
RIN 1545-BO71


Qualified Business Income Deduction; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

-----------------------------------------------------------------------

SUMMARY: This document contains corrections to final regulations (TD 
9847) that were published in the Federal Register on Friday, February 
8, 2019. The final regulations are concerning the deduction for 
qualified business income under section 199A of the Internal Revenue 
Code.

DATES: This correction is effective on April 17, 2019 and is applicable 
on or after February 8, 2019.

FOR FURTHER INFORMATION CONTACT: Vishal R. Amin or Sonia K. Kothari at 
(202) 317-6850 or Robert D. Alinsky, Margaret Burow, or Wendy L. 
Kribell at (202) 317-5279.

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations (TD 9847), published on February 8, 2019 (84 
FR 2952), that are the subject of this correction are issued under 
section 199A of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 9847) contain errors that 
need to be corrected.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 2. Section 1.199A-0 is amended by revising the entry for Sec.  
1.199A-1(a)(16) and adding an entry for Sec.  1.199A-2(b)(2)(iv) to 
read as follows:


Sec.  1.199A-0   Table of contents.

* * * * *


Sec.  1.199A-1  Operational rules.

    (a) * * *
    (16) W-2 wages.
* * * * *


Sec.  1.199A-2  Determination of W-2 Wages and unadjusted basis 
immediately after acquisition of qualified property.

* * * * *
    (b) * * *
    (2) * * *
    (iv) Methods for calculating W-2 wages.
* * * * *

0
Par. 3. Section 1.199A-1 is amended by revising the second sentence of 
paragraph (b)(10) and the seventh

[[Page 15955]]

sentence of paragraph (d)(4)(xi)(B) to read as follows:


Sec.  1.199A-1   Operational rules.

* * * * *
    (b) * * *
    (10) * * * Other passthrough entities including common trust funds 
as described in Sec.  1.6032-1T and religious or apostolic 
organizations described in section 501(d) are also treated as RPEs if 
the entity files a Form 1065, U.S. Return of Partnership Income, and is 
owned, directly or indirectly, by at least one individual, estate, or 
trust. * * *
* * * * *
    (d) * * *
    (4) * * *
    (xi) * * *
    (B) * * * Thus, F has overall net QBI of $80,000 when all trades or 
businesses are taken together ($200,000) plus $150,000 minus $120,000 
minus the carryover loss of ($150,000). * * *
* * * * *

0
Par. 4. Section 1.199A-2 is amended by revising the fifth sentence of 
paragraph (b)(2)(iii)(A) to read as follows:


Sec.  1.199A-2  Determination of W-2 wages and unadjusted basis 
immediately after acquisition of qualified properly.

* * * * *
    (b) * * *
    (2) * * *
    (iii) * * *
    (A) * * * Section 6071(c) provides that Forms W-2 and W-3 must be 
filed on or before January 31 of the year following the calendar year 
to which such returns relate (but see the special rule in Sec.  
31.6071(a)-1T(a)(3)(i) of this chapter for monthly returns filed under 
Sec.  31.6011(a)-5(a) of this chapter). * * *
* * * * *

0
Par. 5. Section 1.199A-4 is amended by revising the fourth sentence of 
paragraph (c)(3), the first sentence of paragraph (c)(4)(ii), and the 
third sentence of paragraph (d)(15)(ii) to read as follows:


 Sec.  1.199A-4  Aggregation.

* * * * *
    (c) * * *
    (3) * * * However, an RPE may add a newly created or newly acquired 
(including through non-recognition transfers) trade or business to an 
existing aggregated trade or business (including the aggregated trade 
or business of a lower-tier RPE) if the requirements of paragraph 
(b)(1) of this section are satisfied. * * *
    (4) * * *
    (ii) * * * If an RPE fails to attach the statement required in 
paragraph (c)(4)(i) of this section, the Commissioner may disaggregate 
the RPE's trades or businesses. * * *
    (d) * * *
    (15) * * *
    (ii) * * * If PRS2 does aggregate the two businesses, PRS1 may not 
aggregate its food service business with PRS2's aggregated trades or 
businesses. * * *
* * * * *

0
Par. 6. Section 1.199A-5 is amended by revising the sixth sentence of 
paragraph (b)(3)(xiv) and the eighth sentence of paragraph 
(d)(3)(iii)((B) to read as follows:


 Sec.  1.199A-5   Specified service trades or businesses and the trade 
or business of performing services as an employee.

* * * * *
    (b) * * *
    (3) * * *
    (xiv) * * * Several of the employees and K have worked in the 
bicycle business for many years, and have acquired substantial skill 
and reputation in the field. * * *
* * * * *
    (d) * * *
    (3) * * *
    (iii) * * *
    (B) * * * Unless the presumption is rebutted with a showing that, 
under Federal tax law, regulations, and principles (including common-
law employee classification rules), C is not an employee, C's 
distributive share of Law Firm 2 income (including any guaranteed 
payments) will not be QBI for purposes of section 199A.* * *
* * * * *

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2019-07652 Filed 4-16-19; 8:45 am]
 BILLING CODE 4830-01-P