That makes sense. Do you know what code section/regulation/rule/law says that?
Didn't the rule change in 2018 to allow forfeitures to be used to fund QNECs generally? What distinguishes the earnings on those QNECs from the QNEC itself?
My confusion is mainly because my gut (and the partners) tell me that you're right but Rev. Proc. 2021-30 (page 31) says the "corrective allocation . . . should be adjusted for Earnings," which implies to me that the earnings are then part of the corrective allocation (QNEC) after the corrective allocation (QNEC) is adjusted for them. Then, the 2018 Final Regulation (Discussion on IRS website) says that forfeitures can be used to pay for QNECs (post-2018).
Thanks,
Naveed
