The IRS has released final regulations that provide guidance on the business interest expense deduction limitation instituted by the Tax Cuts and Jobs Act (TCJA) and the CARES Act. The TCJA limited the deduction for business interest incurred by businesses to 30% of a taxpayer’s adjusted taxable income (ATI). The CARES Act increased the deduction to 50% of ATI for the 2019 and 2020 tax years. The final regs explain: how to calculate the business interest expense deduction limitation; what constitutes interest for purposes of the limitation; which taxpayers are subject to the limitation; and how the limitation applies in consolidated group and partnership. Contact Cg for more information. © 2020
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