This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for July 2019 used under § 417(e)(3)(D), the 24-month average segment rates applicable for July 2019, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

The final regulations adopt proposed regulations providing that if a corporation makes a tax-free distribution of the stock of another corporation and the property of one of the corporations becomes the property of a real estate investment trust, gain must be recognized, and taxed at the corporate level, in an amount approximating the amount that would have been recognized if the corporation had disposed of the property in a taxable sale, exchange, or distribution. The final regulations also adopt a proposed limitation providing that the gain immediately recognized by a corporation engaging in certain tax-free distributions and a later conversion transaction will be limited to gain on property traceable to the distribution.

26 CFR 1.337(d)-7

This Notice provides methods for calculating W-2 wages for purposes of section 199A(g)(1)(B)(i), which, for certain specified agricultural or horticultural cooperatives provides a limitation based on W-2 wages to the amount of a deduction under section 199A(g)(1)(A) of 9 percent of the lesser of qualified production activities income or taxable income of a Specified Cooperative.

Beginning of Construction for Sections 45 and 48; Tolling and Extension of Continuity Safe Harbor to Mitigate Significant National Security Concerns. This notice updates and clarifies the guidance provided in prior IRS notices regarding the beginning of construction for sections 45 and 48. Specifically, the notice provides that the Continuity Safe Harbor may be tolled and extended in certain limited circumstances involving significant national security concerns.

These proposed regulations provide rules regarding the determination of ownership in a passive foreign investment company (“PFIC”) and the treatment of certain income received or accrued by a foreign corporation and assets held by a foreign corporation for purposes of determining whether it is a PFIC, including guidance concerning the qualifying insurance corporation rules. The regulations affect United States persons with direct or indirect ownership interests in certain foreign corporations.

The proposed regulations provide guidance: (1) to a patron of a cooperative to which subchapter T applies on the income from that cooperative the patron can use to calculate the patron’s qualified business income deduction under § 199A(a), (2) on a patron’s reduction under § 199A(b)(7) of the patron’s § 199A(a) deduction in a taxable year in which the patron receives a specific type of payment from a specified agricultural or horticultural cooperative, and (3) on the deduction for domestic production activities under § 199A(g) available to specified agricultural or horticultural cooperatives and their patrons. The proposed regulations also define patronage and nonpatronage under § 1388.