Source: https://www.federalregister.gov/documents/2014/04/01/2014-07160/net-investment-income-tax-correction
Timestamp: 2020-07-09 02:16:47
Document Index: 481761966

Matched Legal Cases: ['§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u20091']

Federal Register :: Net Investment Income Tax; Correction
A Rule by the Internal Revenue Service on 04/01/2014
79 FR 18159
18159-18161 (3 pages)
1545-BK44
2014-07160
IRS-2012-0049
https://www.federalregister.gov/d/2014-07160
Par. 2. Section 1.469-11 is amended by revising the first sentence of paragraph (b)(3)(iv)(C)(1) and the last sentence of paragraph (b)(3)(iv)(C)(3) Example 4. to read as follows:
Effective date and transition rules.
(C) * * * (1) * * * An individual, estate, or trust also may regroup activities, in the manner described in paragraph (b)(3)(iv)(A) of this section, on an amended return only if the changes reported on such amended return cause the taxpayer to meet the Eligibility Criteria for the first time beginning in the taxable year for which the amended return is applicable and that the taxable year is not closed by the Start Printed Page 18160period of limitations on assessments under section 6501. * * *
* * * Third, Y may file an original or an amended return to regroup in a manner different from groupings in effect prior to Year 1 and different from the Year 1 groupings (for example, Y could choose to group Activity C and D into a single activity, thus causing Y to have two groups; Group A-B and Group C-D).
Par. 3. Section 1.1411-0 is amended by revising the entries in the table of contents for § 1.1411-3(c)(2)(ii) and (iii) to read as follows:
Table of contents of provisions applicable to section 1411.
Par. 4. Section 1.1411-2 is amended by revising the first sentence of paragraph (b)(2) to read as follows:
§ 1.1411-2
Application to individuals.
During Year 1 (a year in which section 1411 is in effect), A, an unmarried United States citizen, has modified adjusted gross income (as defined in paragraph (c) of this section) of $190,000, which includes $50,000 of net investment income. * * *
Par. 5. Section 1.1411-3 is amended by revising the second sentence of paragraph (c)(3)(ii)(A) and the first sentence of paragraph (c)(3)(iii)(B) to read as follows:
(B) The adjusted gross income for the ESBT is $40,000 and is determined as follows: * * *
Par. 6. Section 1.1411-4 is amended as follows:
3. The language “A” in the third sentence of paragraph (f)(2)(v) Example 2. (iii) is removed and “A's” is added in its place.
5. The language “§ 1.171-2T(a)(4)(i)(C)” in paragraph (f)(3)(vii) is removed and “§ 1.171-2(a)(4)(i)(C)” is added in its place.
* * * (i) PRS, a partnership for Federal income tax purposes, operates an automobile dealership. * * *
(iii) * * * Pursuant to paragraph (d) of this section, A takes into account the $60,000 at ordinary loss from PRS and the $50,000 of long term capital gain in the computation of A's net gain. * * *
Par. 7. Section 1.1411-5 is amended by revising paragraph (b)(2)(i) and (b)(2)(iii) to read as follows:
§ 1.1411-5
Trades or businesses to which tax applies.
(2) * * * (i) Income and gain recharacterization. To the extent that any income or gain from a trade or business is recharaterized as “not from a passive activity” by reason of § 1.469-2T(f)(2), § 1.469-2(f)(5), or § 1.469-2(f)(6), such trade or business does not constitute a passive activity within the meaning of paragraph (b)(1)(ii) of this section solely with respect to such recharaterized income or gain.
(iii) Exception for certain portfolio recharacterizations. To the extent that any income or gain from a trade or business is recharacterized as “not from a passive activity” and is further characterized as portfolio income under § 1.469-2(f)(10) or § 1.469-2(c)(2)(iii)(F), then such trade or business constitutes a passive activity within the meaning of paragraph (b)(1)(ii) of this section solely with respect to such recharacterized income or gain.
Par. 8. Section 1.1411-10 is amended as follows:
§ 1.1411-10
Controlled foreign corporations and passive foreign investment companies.
* * *Start Printed Page 18161
(ii) * * * (A) In 2016, A does not include the $15,000 section 951(a)(1)(A) income inclusion in A's net investment income under section 1411(c)(1)(A)(i) and § 1.1411-1(a)(1)(i). * * *
[FR Doc. 2014-07160 Filed 3-31-14; 8:45 am]