IRS to Publish Final Regulations on Section 50(d) Income

Thursday, July 18, 2019 - 1:00pm

The Internal Revenue Service (IRS) will publish in Friday’s Federal Register its final regulations concerning the tax treatment of lessees of investment credit property following an election under Internal Revenue Code Section 50(d)(5). TD 9872 concludes that Section 50(d) income is a partner item rather than a partnership item, that Section 50(d) income goes to the partner in the lessee that used the tax credits and that partners are not entitled to increase their bases in their partnership interests as a result of Section 50(d) income inclusion. The regulations will be published almost exactly three years after the IRS issued proposed and temporary regulations. The proposed regulations were issued July 22, 2016, and the final regulations, which were effective Wednesday (July 17), adopt the proposed regulations without modification.