IRS Issues Guidance on Business Interest Expense Limitations under New Tax Law

On April 2, 2018, the Internal Revenue Service (IRS) published Notice 2018-28 to announce regulations that  the agency intends  to issue that will provide new rules related to the deduction of the business interest expense, as amended by the Tax Cuts and Jobs Act (P.L. 115-97). The Tax Cuts and Jobs Act amended section 163(j) of the Internal Revenue Code to provide new rules limiting the deduction of business interest expense for taxable years beginning after December 31, 2017.  In general, newly amended section 163(j) imposes a limitation on deductions for business interest incurred by certain large businesses.  For most large businesses, the business interest expense is limited to any business interest income plus 30 percent of the business’ adjusted taxable income.

Tuesday, April 3, 2018

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