Section 199A Rules for Cooperatives and Their Patrons; Correction, 68898-68900 [2022-24576]
Download as PDF
<![CDATA[
68898
Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Rules and Regulations
This action would not impose
recordkeeping or reporting requirements
on State or local governments,
individuals, businesses, or
organizations. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a
currently valid OMB control number.
List of Subjects in 21 CFR Part 1308
Administrative practice and
procedure, Drug traffic control,
Reporting and recordkeeping
requirements.
2. Amend § 1308.11 by re-designating
paragraphs (f)(1) through (f)(9) as
paragraphs (f)(2) through (f)(10), and
adding a new paragraph (f)(1) to read as
follows:
■
For the reasons set out above, 21 CFR
part 1308 is amended as follows:
PART 1308—SCHEDULES OF
CONTROLLED SUBSTANCES
§ 1308.11
*
1. The authority citation for 21 CFR
part 1308 continues to read as follows:
■
Schedule I.
*
*
(f) * * *
*
*
Authority: 21 U.S.C. 811, 812, 871(b),
956(b), unless otherwise noted.
(1) Amineptine (7-[(10,11-dihydro-5H-dibenzo[a,d]cyclohepten-5-yl)amino]heptanoic acid) ......................................................
*
*
*
*
production activities of specified
agricultural or horticultural
cooperatives.
*
Signing Authority
This document of the Drug
Enforcement Administration was signed
on November 9, 2022, by Administrator
Anne Milgram. That document with the
original signature and date is
maintained by DEA. For administrative
purposes only, and in compliance with
requirements of the Office of the Federal
Register, the undersigned DEA Federal
Register Liaison Officer has been
authorized to sign and submit the
document in electronic format for
publication, as an official document of
DEA. This administrative process in no
way alters the legal effect of this
document upon publication in the
Federal Register.
Heather Achbach,
Federal Register Liaison Officer, Drug
Enforcement Administration.
These corrections are effective
on November 17, 2022 and applicable
after January 19, 2021.
FOR FURTHER INFORMATION CONTACT:
Jason Deirmenjian at (202) 317–4470
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
DATES:
Background
The final regulations (TD 9947)
subject to this correction are issued
under sections 1381 through 1388 and
section 199A(g) of the Internal Revenue
Code.
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:
[FR Doc. 2022–25003 Filed 11–16–22; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF THE TREASURY
PART 1—INCOME TAXES
Internal Revenue Service
■
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
26 CFR Part 1
Authority: 26 U.S.C. 7805 * * *
[TD 9947]
Par. 2. Section 1.199A–7 is amended
by:
■ a. Revising the first sentence of
paragraph (c)(1).
■ b. Revising the second sentence of
paragraph (c)(2) introductory text.
■ c. Revising paragraphs (c)(2)(ii) and
(iii).
■ d. Revising the first sentence of
paragraph (c)(3).
■ e. Revising the first sentence of
paragraph (d)(1).
■ f. Revising the first sentence of
paragraph (d)(3)(i).
■ g. Redesignating paragraph
(d)(3)(ii)(B)(i2) as paragraph
(d)(3)(ii)(B)(2).
The revisions read as follows:
■
RIN 1545–BO90
Section 199A Rules for Cooperatives
and Their Patrons; Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
This document contains
corrections to Treasury Decision 9947,
published in the Federal Register on
Tuesday, January 19, 2021. Treasury
Decision 9947 contained final
regulations under the qualified business
income provisions of the Internal
Revenue Code regarding the deduction
for income attributable to domestic
lotter on DSK11XQN23PROD with RULES1
SUMMARY:
VerDate Sep<11>2014
16:17 Nov 16, 2022
Jkt 259001
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
1219
§ 1.199A–7 Section 199A(a) Rules for
Cooperatives and their patrons.
*
*
*
*
*
(c) * * *
(1) * * * QBI means the net amount
of qualified items of income, gain,
deduction, and loss with respect to any
trade or business as determined under
the rules of section 199A(c)(3) and
§ 1.199A–3(b). * * *
(2) * * * In situations where the
patron receives distributions described
in paragraph (c)(1) of this section, the
Cooperative must determine whether
those distributions include qualified
items of income, gain, deduction, and
loss as determined under rules of
section 199A(c)(3) and § 1.199A–3(b).
* * *
*
*
*
*
*
(ii) The distributions are qualified
items of income, gain, deduction, and
loss as determined under rules of
section 199A(c)(3) and § 1.199A–3(b) at
the Cooperative’s trade or business
level;
(iii) The distributions are not items
from an SSTB as defined in section
199A(d)(2) at the Cooperative’s trade or
business level (except as permitted by
the threshold rules in section 199A(d)(3)
and § 1.199A–5(a)(2)); and
*
*
*
*
*
(3) * * * In the case of a Cooperative
that makes distributions described in
paragraph (c)(1) of this section to a
patron, the Cooperative must determine
the amount of qualified items of income,
gain, deduction, and loss as determined
under the rules of section 199A(c)(3)
and § 1.199A–3(b) in those
distributions. * * *
(d) * * *
(1) * * * This section provides
guidance on the determination of SSTBs
as defined in section 199A(d)(2) and
§ 1.199A–5. * * *
*
*
*
*
*
(3) * * *
(i) * * * In the case of a Cooperative
that makes distributions described in
paragraph (c)(1) of this section to a
E:\FR\FM\17NOR1.SGM
17NOR1
Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Rules and Regulations
patron, the Cooperative must determine
the amount of qualified items of income,
gain, deduction, and loss as determined
under the rules of section 199A(c)(3)
and § 1.199A–3(b) with respect to
SSTBs directly conducted by the
Cooperative. * * *
*
*
*
*
*
■ Par. 3. Section 1.199A–8 is amended
by:
■ a. Adding a heading to paragraph
(d)(1).
■ b. Revising the first sentence of
paragraph (d)(2)(i).
■ c. Revising the fourth sentence of
paragraph (d)(3).
■ d. Revising the second sentence of
paragraph (e)(3)(ii).
■ e. Revising the second sentence of
paragraph (e)(4)(ii).
■ f. Revising the third sentence of
paragraph (e)(6)(i).
■ g. Revising the second through fourth
and sixth sentences of paragraph
(e)(6)(ii).
■ h. Revising the second and fourth
through sixth sentences of paragraph
(e)(7)(i).
■ i. Revising the first and second
sentences of paragraph (e)(7)(ii).
■ j. Revising the second and third
sentences of paragraph (e)(8)(i).
■ k. Revising the first through third
sentences of paragraph (e)(8)(ii).
■ l. Revising the first sentence of
paragraph (f).
The revisions read as follows:
§ 1.199A–8 Deduction for income
attributable to domestic production
activities of specified agricultural or
horticultural cooperatives.
lotter on DSK11XQN23PROD with RULES1
*
*
*
*
*
(d) * * *
(1) Permitted amount— * * *
(2) * * *
(i) * * * A Specified Cooperative is
permitted to pass through an amount
equal to the portion of the Specified
Cooperative’s section 199A(g) deduction
that is allowed with respect to the
portion of the cooperative’s QPAI that is
attributable to the qualified payments
the Specified Cooperative distributed to
the patron during the taxable year and
identified on the notice required in
§ 1.199A–7(f)(3) on an attachment to or
on the Form 1099–PATR, Taxable
Distributions Received From
Cooperatives (Form 1099–PATR), (or
any successor form) issued by the
Specified Cooperative to the patron,
unless otherwise provided by the
instructions to the Form 1099–PATR.
* * *
*
*
*
*
*
(3) * * * The Specified Cooperative
must report the amount of section
199A(g) deduction passed through to
VerDate Sep<11>2014
16:17 Nov 16, 2022
Jkt 259001
the patron on an attachment to or on the
Form 1099–PATR (or any successor
form) issued by the Specified
Cooperative to the patron, unless
otherwise provided by the instructions
to the Form 1099–PATR.
*
*
*
*
*
(e) * * *
(3) * * *
(ii) * * * C’s QPAI and taxable
income both equal $1,000
($1,800¥$800). * * *
(4) * * *
(ii) * * * C’s section 199A(g)
deduction attributable to patronage
sources is the same as the deduction
calculated by the nonexempt Specified
Cooperative in Example 3 in paragraph
(e)(3) of this section.
*
*
*
*
*
(6) * * *
(i) * * * D pays $300,000 for its
patrons’ corn at the time the grain was
delivered in the form of per-unit retain
allocations and its W–2 wages (as
defined in § 1.199A–11) for 2020 total
$300,000. * * *
(ii) * * * D’s QPAI and taxable
income is $1,200,000. D’s section
199A(g) deduction for its taxable year
2020 is $108,000 (.09 × $1,200,000).
Because this amount is less than 50% of
D’s W–2 wages, the entire amount is
allowed as a section 199A(g) deduction.
* * * The section 199A(g) deduction of
$108,000 is applied to, and reduces, D’s
taxable income.
(7) * * *
(i) * * * D declares a patronage
dividend for its 2020 taxable year of
$900,000, which it pays on March 15,
2021. * * * On March 15, 2021, Patron
A receives a $9,000 patronage dividend
that is a qualified payment under
paragraph (d)(2)(ii) of this section from
D. In the notice that accompanies the
patronage dividend, Patron A is
designated a $1,080 section 199A(g)
deduction. Under paragraph (a) of this
section, Patron A may claim a $1,080
section 199A(g) deduction for the
taxable year ending December 31, 2021,
subject to the limitations set forth under
paragraph (d)(4) of this section. * * *
(ii) Under paragraph (d)(7) of this
section, D is required to reduce its
section 1382 deduction of $1,200,000 by
the $108,000 section 199A(g) deduction
passed through to patrons (whether D
pays patronage dividends on book or
Federal income tax net earnings). As a
consequence, D is entitled to a section
1382 deduction for the taxable year
ending December 31, 2020, in the
amount of $1,092,000
($1,200,000¥$108,000) and to a section
199A(g) deduction in the amount of
$108,000 ($1,200,000 × .09). * * *
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
68899
(8) * * *
(i) * * * In 2020, D pays its patrons
a $400,000 ($900,000¥$500,000 already
paid) patronage dividend in cash or a
combination of cash and qualified
written notices of allocation. Under
paragraph (d)(7) of this section and
section 1382, D is allowed a deduction
of $1,092,000 ($1,200,000¥$108,000
section 199A(g) deduction), whether
patronage net earnings are distributed
on book or Federal income tax net
earnings.
(ii) The patrons will have received a
gross amount of $1,200,000 in qualified
payments under paragraph (d)(2)(ii) of
this section from Cooperative D
($300,000 paid as per-unit retain
allocations, $500,000 paid during the
taxable year as advances, and the
additional $400,000 paid as patronage
dividends). If D passes through its entire
section 199A(g) deduction to its patrons
by providing the notice required by
paragraph (d)(3) of this section, then the
patrons will be allowed a $108,000
section 199A(g) deduction, resulting in
a net $1,092,000 taxable distribution
from D. Pursuant to paragraph (d)(8) of
this section, any of the $1,200,000
received by patrons that are Specified
Cooperatives from D is not taken into
account for purposes of calculating the
patrons’ section 199A(g) deduction.
* * *
(f) * * * In the case described in
section 199A(g)(5)(B), where a Specified
Cooperative is a partner in a
partnership, the partnership must
separately identify and report on the
Schedule K–1 of the Form 1065, U.S.
Return of Partnership Income (or any
successor form) issued to the Specified
Cooperative partner the cooperative’s
share of gross receipts and related
deductions, W–2 wages, and COGS,
unless otherwise provided by the
instructions to the Form. * * *
*
*
*
*
*
■ Par. 4. Section 1.199A–9 is amended
by:
■ a. Revising the first sentence of
paragraph (c)(3)(ii).
■ b. Redesignating paragraphs
(j)(3)(i)(B)(1) introductory text and
(j)(3)(i)(B)(1)(i) and (ii) as paragraphs
(j)(3)(i)(B)(1) introductory text and
(j)(3)(i)(B)(1)(i) and (ii).
■ c. Revising newly redesignated
paragraph (j)(3)(i)(B)(1)(ii).
■ d. Redesignating paragraphs
(j)(3)(i)(B)(2) introductory text and
(j)(3)(i)(B)(2)(i) and (ii) as paragraphs
(j)(3)(i)(B)(2) introductory text and
(j)(3)(i)(B)(2)(i) and (ii).
■ e. Redesignating paragraphs
(j)(3)(i)(B)(3) introductory text and
(j)(3)(i)(B)(3)(i) through (iii) as
E:\FR\FM\17NOR1.SGM
17NOR1
68900
Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Rules and Regulations
paragraphs (j)(3)(i)(B)(3) introductory
text and (j)(3)(i)(B)(3)(i) through (iii).
■ f. Redesignating paragraphs
(j)(3)(i)(B)(4) introductory text and
(j)(3)(i)(B)(4)(i) and (ii) as paragraphs
(j)(3)(i)(B)(4) introductory text and
(j)(3)(i)(B)(4)(i) and (ii).
■ g. Redesignating paragraph
(j)(3)(i)(B)(5) as paragraph (j)(3)(i)(B)(5).
The revisions read as follows:
§ 1.199A–9
receipts.
Domestic production gross
*
*
*
*
*
(c) * * *
(3) * * *
(ii) * * * A Specified Cooperative’s
applicable gross receipts as provided in
§ 1.199A–8(b) and/or (c) may be treated
as non-DPGR if less than 10 percent of
the Specified Cooperative’s total gross
receipts are DPGR. * * *
*
*
*
*
*
(j) * * *
(3) * * *
(i) * * *
(B) * * *
(1) * * *
(ii) The warranty is neither separately
offered by the Specified Cooperative nor
separately bargained for with customers
(that is, a customer cannot purchase the
agricultural or horticultural products
without the warranty).
*
*
*
*
*
Par. 5. Section 1.199A–12 is amended
by:
■ a. Redesignating paragraphs (e)(i) and
(ii) as paragraph (e)(1) and (2).
■ b. Further redesignating newly
redesiganted paragraphs (e)(2)(A) and
(B) as paragraphs (e)(2)(i) and (ii).
■ c. Revising the last sentence of newly
redesignated paragraph (e)(2)(ii).
The revision reads as follows:
■
§ 1.199A–12
Expanded affiliated groups.
*
*
*
*
(e) * * *
(2) * * *
(ii) * * * Accordingly, P is allocated
$1,080 ($1,350 × $16,000/$20,000) and S
is allocated $270 ($1,350 × $4,000/
$20,000).
*
*
*
*
*
lotter on DSK11XQN23PROD with RULES1
*
DEPARTMENT OF EDUCATION
DEPARTMENT OF COMMERCE
34 CFR Parts 600, 668, and 690
Patent and Trademark Office
[Docket ID ED–2022–OPE–0062]
37 CFR Part 1
[Docket No. PTO–P–2017–0011]
RIN 1840–AD54, 1840–AD55, 1840–AD66,
1840–AD69
Pell Grants for Prison Education
Programs; Determining the Amount of
Federal Education Assistance Funds
Received by Institutions of Higher
Education (90/10); Change in
Ownership and Change in Control
Correction
1. On page 65486, in the second
column, on the twentieth line, the
section heading titled ‘‘§ 600. Institution
of higher education.’’ is corrected to
read as set forth below.
■
§ 600.4 Institution of higher education.
[Corrected]
*
*
*
*
2. On page 65490, in the first column,
on the thirty-sixth line, the section
heading titled ‘‘§ 668.1 Program
participation agreement.’’ is corrected to
read as set forth below.
■
§ 668.14 Program participation agreement.
[Corrected]
*
*
*
*
*
3. On page 65495, in the second
column, on the seventeenth line, in the
‘‘contents section’’ listing, the entry
titled ‘‘668.23 Scope and purpose.’’ is
corrected to read ‘‘668.234 Scope and
purpose.’’
*
*
*
*
*
■
4. On the same page, in the same
column, the section heading titled
‘‘§ 668.23 Scope and purpose.’’ is
corrected to read as set forth below.
■
§ 668.234
*
*
Scope and purpose. [Corrected]
*
*
*
[FR Doc. C1–2022–23078 Filed 11–14–22; 2:00 pm]
BILLING CODE 0099–10–D
Oluwafunmilayo A. Taylor,
Branch Chief, Legal Processing Division,
Associate Chief Counsel, (Procedure and
Administration).
[FR Doc. 2022–24576 Filed 11–16–22; 8:45 am]
BILLING CODE 4830–01–P
VerDate Sep<11>2014
16:17 Nov 16, 2022
Jkt 259001
PO 00000
Date of Receipt of Electronic
Submissions of Patent
Correspondence
United States Patent and
Trademark Office, Department of
Commerce.
ACTION: Final rule.
AGENCY:
The United States Patent and
Trademark Office (USPTO or Office) is
amending the patent rules of practice to
provide that the receipt date of
correspondence officially submitted
electronically by way of the USPTO
patent electronic filing system is the
date in the Eastern time zone of the
United States (Eastern Time) when the
USPTO received the correspondence
rather than the date on which the
correspondence is received at the
correspondence address in Alexandria,
Virginia. This change is necessary
because the USPTO is expecting to
provide servers for receiving electronic
submissions in locations that are
separate from the USPTO headquarters
in Alexandria, Virginia. This change
will ensure consistency and
predictability with respect to
correspondence receipt dates, as the
date of receipt accorded to
correspondence submitted
electronically will not depend on the
location of USPTO servers. The USPTO
is also amending the patent rules of
practice to make other clarifying
changes regarding the receipt of
electronic submissions, including
providing a definition for Eastern Time.
These changes harmonize the patent
rules with the trademark rules and
provide clarity regarding the date of
receipt of electronic submissions.
DATES: This rule is effective on
December 19, 2022.
FOR FURTHER INFORMATION CONTACT: For
patent-related inquiries, please contact
Mark O. Polutta, Senior Legal Advisor,
Office of Patent Legal Administration, at
571–272–7709; or Kristie M. Kindred,
Legal Advisor, Office of Patent Legal
Administration, at 571–272–9016; or
you can send inquiries to
patentpractice@uspto.gov.
SUPPLEMENTARY INFORMATION: The
USPTO’s servers that receive electronic
submissions are currently located in
Alexandria, Virginia. However, to
enhance resiliency, the USPTO is in the
SUMMARY:
In Rule Document 2022–23078,
appearing on pages 65426–65498 in the
issue of Friday, October 28, 2022, make
the following corrections:
*
RIN 0651–AD21
Frm 00014
Fmt 4700
Sfmt 4700
E:\FR\FM\17NOR1.SGM
17NOR1
]]>Agencies
[Federal Register Volume 87, Number 221 (Thursday, November 17, 2022)]
[Rules and Regulations]
[Pages 68898-68900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24576]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9947]
RIN 1545-BO90
Section 199A Rules for Cooperatives and Their Patrons; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to Treasury Decision 9947,
published in the Federal Register on Tuesday, January 19, 2021.
Treasury Decision 9947 contained final regulations under the qualified
business income provisions of the Internal Revenue Code regarding the
deduction for income attributable to domestic production activities of
specified agricultural or horticultural cooperatives.
DATES: These corrections are effective on November 17, 2022 and
applicable after January 19, 2021.
FOR FURTHER INFORMATION CONTACT: Jason Deirmenjian at (202) 317-4470
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (TD 9947) subject to this correction are
issued under sections 1381 through 1388 and section 199A(g) of the
Internal Revenue Code.
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-7 is amended by:
0
a. Revising the first sentence of paragraph (c)(1).
0
b. Revising the second sentence of paragraph (c)(2) introductory text.
0
c. Revising paragraphs (c)(2)(ii) and (iii).
0
d. Revising the first sentence of paragraph (c)(3).
0
e. Revising the first sentence of paragraph (d)(1).
0
f. Revising the first sentence of paragraph (d)(3)(i).
0
g. Redesignating paragraph (d)(3)(ii)(B)(i2) as paragraph
(d)(3)(ii)(B)(2).
The revisions read as follows:
Sec. 1.199A-7 Section 199A(a) Rules for Cooperatives and their
patrons.
* * * * *
(c) * * *
(1) * * * QBI means the net amount of qualified items of income,
gain, deduction, and loss with respect to any trade or business as
determined under the rules of section 199A(c)(3) and Sec. 1.199A-3(b).
* * *
(2) * * * In situations where the patron receives distributions
described in paragraph (c)(1) of this section, the Cooperative must
determine whether those distributions include qualified items of
income, gain, deduction, and loss as determined under rules of section
199A(c)(3) and Sec. 1.199A-3(b). * * *
* * * * *
(ii) The distributions are qualified items of income, gain,
deduction, and loss as determined under rules of section 199A(c)(3) and
Sec. 1.199A-3(b) at the Cooperative's trade or business level;
(iii) The distributions are not items from an SSTB as defined in
section 199A(d)(2) at the Cooperative's trade or business level (except
as permitted by the threshold rules in section 199A(d)(3) and Sec.
1.199A-5(a)(2)); and
* * * * *
(3) * * * In the case of a Cooperative that makes distributions
described in paragraph (c)(1) of this section to a patron, the
Cooperative must determine the amount of qualified items of income,
gain, deduction, and loss as determined under the rules of section
199A(c)(3) and Sec. 1.199A-3(b) in those distributions. * * *
(d) * * *
(1) * * * This section provides guidance on the determination of
SSTBs as defined in section 199A(d)(2) and Sec. 1.199A-5. * * *
* * * * *
(3) * * *
(i) * * * In the case of a Cooperative that makes distributions
described in paragraph (c)(1) of this section to a
[[Page 68899]]
patron, the Cooperative must determine the amount of qualified items of
income, gain, deduction, and loss as determined under the rules of
section 199A(c)(3) and Sec. 1.199A-3(b) with respect to SSTBs directly
conducted by the Cooperative. * * *
* * * * *
0
Par. 3. Section 1.199A-8 is amended by:
0
a. Adding a heading to paragraph (d)(1).
0
b. Revising the first sentence of paragraph (d)(2)(i).
0
c. Revising the fourth sentence of paragraph (d)(3).
0
d. Revising the second sentence of paragraph (e)(3)(ii).
0
e. Revising the second sentence of paragraph (e)(4)(ii).
0
f. Revising the third sentence of paragraph (e)(6)(i).
0
g. Revising the second through fourth and sixth sentences of paragraph
(e)(6)(ii).
0
h. Revising the second and fourth through sixth sentences of paragraph
(e)(7)(i).
0
i. Revising the first and second sentences of paragraph (e)(7)(ii).
0
j. Revising the second and third sentences of paragraph (e)(8)(i).
0
k. Revising the first through third sentences of paragraph (e)(8)(ii).
0
l. Revising the first sentence of paragraph (f).
The revisions read as follows:
Sec. 1.199A-8 Deduction for income attributable to domestic
production activities of specified agricultural or horticultural
cooperatives.
* * * * *
(d) * * *
(1) Permitted amount-- * * *
(2) * * *
(i) * * * A Specified Cooperative is permitted to pass through an
amount equal to the portion of the Specified Cooperative's section
199A(g) deduction that is allowed with respect to the portion of the
cooperative's QPAI that is attributable to the qualified payments the
Specified Cooperative distributed to the patron during the taxable year
and identified on the notice required in Sec. 1.199A-7(f)(3) on an
attachment to or on the Form 1099-PATR, Taxable Distributions Received
From Cooperatives (Form 1099-PATR), (or any successor form) issued by
the Specified Cooperative to the patron, unless otherwise provided by
the instructions to the Form 1099-PATR. * * *
* * * * *
(3) * * * The Specified Cooperative must report the amount of
section 199A(g) deduction passed through to the patron on an attachment
to or on the Form 1099-PATR (or any successor form) issued by the
Specified Cooperative to the patron, unless otherwise provided by the
instructions to the Form 1099-PATR.
* * * * *
(e) * * *
(3) * * *
(ii) * * * C's QPAI and taxable income both equal $1,000 ($1,800-
$800). * * *
(4) * * *
(ii) * * * C's section 199A(g) deduction attributable to patronage
sources is the same as the deduction calculated by the nonexempt
Specified Cooperative in Example 3 in paragraph (e)(3) of this section.
* * * * *
(6) * * *
(i) * * * D pays $300,000 for its patrons' corn at the time the
grain was delivered in the form of per-unit retain allocations and its
W-2 wages (as defined in Sec. 1.199A-11) for 2020 total $300,000. * *
*
(ii) * * * D's QPAI and taxable income is $1,200,000. D's section
199A(g) deduction for its taxable year 2020 is $108,000 (.09 x
$1,200,000). Because this amount is less than 50% of D's W-2 wages, the
entire amount is allowed as a section 199A(g) deduction. * * * The
section 199A(g) deduction of $108,000 is applied to, and reduces, D's
taxable income.
(7) * * *
(i) * * * D declares a patronage dividend for its 2020 taxable year
of $900,000, which it pays on March 15, 2021. * * * On March 15, 2021,
Patron A receives a $9,000 patronage dividend that is a qualified
payment under paragraph (d)(2)(ii) of this section from D. In the
notice that accompanies the patronage dividend, Patron A is designated
a $1,080 section 199A(g) deduction. Under paragraph (a) of this
section, Patron A may claim a $1,080 section 199A(g) deduction for the
taxable year ending December 31, 2021, subject to the limitations set
forth under paragraph (d)(4) of this section. * * *
(ii) Under paragraph (d)(7) of this section, D is required to
reduce its section 1382 deduction of $1,200,000 by the $108,000 section
199A(g) deduction passed through to patrons (whether D pays patronage
dividends on book or Federal income tax net earnings). As a
consequence, D is entitled to a section 1382 deduction for the taxable
year ending December 31, 2020, in the amount of $1,092,000 ($1,200,000-
$108,000) and to a section 199A(g) deduction in the amount of $108,000
($1,200,000 x .09). * * *
(8) * * *
(i) * * * In 2020, D pays its patrons a $400,000 ($900,000-$500,000
already paid) patronage dividend in cash or a combination of cash and
qualified written notices of allocation. Under paragraph (d)(7) of this
section and section 1382, D is allowed a deduction of $1,092,000
($1,200,000-$108,000 section 199A(g) deduction), whether patronage net
earnings are distributed on book or Federal income tax net earnings.
(ii) The patrons will have received a gross amount of $1,200,000 in
qualified payments under paragraph (d)(2)(ii) of this section from
Cooperative D ($300,000 paid as per-unit retain allocations, $500,000
paid during the taxable year as advances, and the additional $400,000
paid as patronage dividends). If D passes through its entire section
199A(g) deduction to its patrons by providing the notice required by
paragraph (d)(3) of this section, then the patrons will be allowed a
$108,000 section 199A(g) deduction, resulting in a net $1,092,000
taxable distribution from D. Pursuant to paragraph (d)(8) of this
section, any of the $1,200,000 received by patrons that are Specified
Cooperatives from D is not taken into account for purposes of
calculating the patrons' section 199A(g) deduction. * * *
(f) * * * In the case described in section 199A(g)(5)(B), where a
Specified Cooperative is a partner in a partnership, the partnership
must separately identify and report on the Schedule K-1 of the Form
1065, U.S. Return of Partnership Income (or any successor form) issued
to the Specified Cooperative partner the cooperative's share of gross
receipts and related deductions, W-2 wages, and COGS, unless otherwise
provided by the instructions to the Form. * * *
* * * * *
0
Par. 4. Section 1.199A-9 is amended by:
0
a. Revising the first sentence of paragraph (c)(3)(ii).
0
b. Redesignating paragraphs (j)(3)(i)(B)(1) introductory text and
(j)(3)(i)(B)(1)(i) and (ii) as paragraphs (j)(3)(i)(B)(1) introductory
text and (j)(3)(i)(B)(1)(i) and (ii).
0
c. Revising newly redesignated paragraph (j)(3)(i)(B)(1)(ii).
0
d. Redesignating paragraphs (j)(3)(i)(B)(2) introductory text and
(j)(3)(i)(B)(2)(i) and (ii) as paragraphs (j)(3)(i)(B)(2) introductory
text and (j)(3)(i)(B)(2)(i) and (ii).
0
e. Redesignating paragraphs (j)(3)(i)(B)(3) introductory text and
(j)(3)(i)(B)(3)(i) through (iii) as
[[Page 68900]]
paragraphs (j)(3)(i)(B)(3) introductory text and (j)(3)(i)(B)(3)(i)
through (iii).
0
f. Redesignating paragraphs (j)(3)(i)(B)(4) introductory text and
(j)(3)(i)(B)(4)(i) and (ii) as paragraphs (j)(3)(i)(B)(4) introductory
text and (j)(3)(i)(B)(4)(i) and (ii).
0
g. Redesignating paragraph (j)(3)(i)(B)(5) as paragraph
(j)(3)(i)(B)(5).
The revisions read as follows:
Sec. 1.199A-9 Domestic production gross receipts.
* * * * *
(c) * * *
(3) * * *
(ii) * * * A Specified Cooperative's applicable gross receipts as
provided in Sec. 1.199A-8(b) and/or (c) may be treated as non-DPGR if
less than 10 percent of the Specified Cooperative's total gross
receipts are DPGR. * * *
* * * * *
(j) * * *
(3) * * *
(i) * * *
(B) * * *
(1) * * *
(ii) The warranty is neither separately offered by the Specified
Cooperative nor separately bargained for with customers (that is, a
customer cannot purchase the agricultural or horticultural products
without the warranty).
* * * * *
0
Par. 5. Section 1.199A-12 is amended by:
0
a. Redesignating paragraphs (e)(i) and (ii) as paragraph (e)(1) and
(2).
0
b. Further redesignating newly redesiganted paragraphs (e)(2)(A) and
(B) as paragraphs (e)(2)(i) and (ii).
0
c. Revising the last sentence of newly redesignated paragraph
(e)(2)(ii).
The revision reads as follows:
Sec. 1.199A-12 Expanded affiliated groups.
* * * * *
(e) * * *
(2) * * *
(ii) * * * Accordingly, P is allocated $1,080 ($1,350 x $16,000/
$20,000) and S is allocated $270 ($1,350 x $4,000/$20,000).
* * * * *
Oluwafunmilayo A. Taylor,
Branch Chief, Legal Processing Division, Associate Chief Counsel,
(Procedure and Administration).
[FR Doc. 2022-24576 Filed 11-16-22; 8:45 am]
BILLING CODE 4830-01-P
