diff --git a/core/modules/taxonomy/lib/Drupal/taxonomy/Tests/TaxonomyTermReferenceItemTest.php b/core/modules/taxonomy/lib/Drupal/taxonomy/Tests/TaxonomyTermReferenceItemTest.php
index 9560ed3..d2744ea 100644
--- a/core/modules/taxonomy/lib/Drupal/taxonomy/Tests/TaxonomyTermReferenceItemTest.php
+++ b/core/modules/taxonomy/lib/Drupal/taxonomy/Tests/TaxonomyTermReferenceItemTest.php
@@ -16,12 +16,18 @@
  * Tests the new entity API for the taxonomy term reference field type.
  */
 class TaxonomyTermReferenceItemTest extends WebTestBase {
+
+  /**
+   * Modules to enable.
+   *
+   * @var array
+   */
   public static $modules = array('field', 'field_sql_storage', 'taxonomy', 'entity_test', 'options');
 
   public static function getInfo() {
     return array(
       'name' => 'Taxonomy reference API',
-      'description' => 'Tests the new entity API for the taxonomy term reference field type.',
+      'description' => 'Tests using entity fields of the taxonomy term reference field type.',
       'group' => 'Taxonomy',
     );
   }
@@ -33,7 +39,7 @@ public function setUp() {
       'machine_name' => drupal_strtolower($this->randomName()),
       'langcode' => LANGUAGE_NOT_SPECIFIED,
     ));
-    taxonomy_vocabulary_save($vocabulary);
+    $vocabulary->save();
     $field = array(
       'field_name' => 'field_test_taxonomy',
       'type' => 'taxonomy_term_reference',
@@ -62,9 +68,12 @@ public function setUp() {
       'vid' => $vocabulary->vid,
       'langcode' => LANGUAGE_NOT_SPECIFIED,
     ));
-    taxonomy_term_save($this->term);
+    $this->term->save();
   }
 
+  /**
+   * Tests using entity fields of the taxonomy term reference field type.
+   */
   public function testTaxonomyTermReferenceItem() {
     $tid = $this->term->id();
     // Just being able to create the entity like this verifies a lot of code.
@@ -72,21 +81,33 @@ public function testTaxonomyTermReferenceItem() {
     $entity->field_test_taxonomy->tid = $this->term->tid;
     $entity->name->value = $this->randomName();
     $entity->save();
-    $id = $entity->id();
-    $entities = entity_load_multiple('entity_test', array($id), TRUE);
-    $entity = reset($entities);
+
+    $entity = entity_load('entity_test', $entity->id());
     $this->assertTrue($entity->field_test_taxonomy instanceof FieldInterface, 'Field implements interface.');
     $this->assertTrue($entity->field_test_taxonomy[0] instanceof FieldItemInterface, 'Field item implements interface.');
+    $this->assertEqual($entity->field_test_taxonomy->tid, $this->term->tid);
     $this->assertEqual($entity->field_test_taxonomy->entity->name, $this->term->name);
     $this->assertEqual($entity->field_test_taxonomy->entity->id(), $tid);
     $this->assertEqual($entity->field_test_taxonomy->entity->uuid(), $this->term->uuid());
+
     // Change the name of the term via the reference.
     $new_name = $this->randomName();
     $entity->field_test_taxonomy->entity->name = $new_name;
     $entity->field_test_taxonomy->entity->save();
     // Verify it is the correct name.
-    $terms = entity_load_multiple('taxonomy_term', array($tid), TRUE);
-    $term = reset($terms);
+    $term = entity_load('taxonomy_term', $tid);
     $this->assertEqual($term->name, $new_name);
+
+    // Make sure the computed term reflects updates to the term id.
+    $term2 = entity_create('taxonomy_term', array(
+      'name' => $this->randomName(),
+      'vid' => $this->term->vid,
+      'langcode' => LANGUAGE_NOT_SPECIFIED,
+    ));
+    $term2->save();
+
+    $entity->field_test_taxonomy->tid = $term2->tid;
+    $this->assertEqual($entity->field_test_taxonomy->entity->id(), $term2->tid);
+    $this->assertEqual($entity->field_test_taxonomy->entity->name, $term2->name);
   }
 }
diff --git a/core/modules/taxonomy/lib/Drupal/taxonomy/Type/TaxonomyTermReferenceItem.php b/core/modules/taxonomy/lib/Drupal/taxonomy/Type/TaxonomyTermReferenceItem.php
index 108d06c..53106ee 100644
--- a/core/modules/taxonomy/lib/Drupal/taxonomy/Type/TaxonomyTermReferenceItem.php
+++ b/core/modules/taxonomy/lib/Drupal/taxonomy/Type/TaxonomyTermReferenceItem.php
@@ -2,7 +2,7 @@
 
 /**
  * @file
- * Definition of Drupal\taxonomy\Type\taxonomyItem.
+ * Definition of Drupal\taxonomy\Type\TaxonomyTermReferenceItem.
  */
 
 namespace Drupal\taxonomy\Type;
@@ -16,7 +16,7 @@
 class TaxonomyTermReferenceItem extends FieldItemBase  {
 
   /**
-   * Field definitions of the contained properties.
+   * Property definitions of the contained properties.
    *
    * @see self::getPropertyDefinitions()
    *
@@ -40,7 +40,7 @@ public function getPropertyDefinitions() {
           'entity type' => 'taxonomy_term',
         ),
         'label' => t('Term'),
-        'description' => t('The referenced taxonom term'),
+        'description' => t('The referenced taxonomy term'),
         // The entity object is computed out of the tid.
         'computed' => TRUE,
         'read-only' => FALSE,
@@ -65,8 +65,11 @@ public function setValue($values) {
     if (isset($values['tid'])) {
       $this->properties['tid']->setValue($values['tid']);
     }
+    elseif (isset($values['entity'])) {
+      $this->properties['entity']->setValue($values['entity']);
+    }
     else {
-      $this->properties['entity']->setValue(isset($values['entity']) ? $values['entity'] : NULL);
+      $this->properties['entity']->setValue(NULL);
     }
     unset($values['entity'], $values['tid']);
     if ($values) {