The Internal Revenue Service (IRS) has issued a proposed rule regarding the limitation on the deduction for business interest expense after the enactment of recent tax legislation. The regulations affect taxpayers that have deductible business interest expense, other than certain small businesses, electing real property trades or businesses, electing farming businesses, and certain utility businesses. 

The rule restricts deductibility of net business interest expense and generally apply to taxpayers with gross receipts over $25 million and restrict the deductibility of net interest expense to an amount that does not exceed 30 percent of a taxpayer’s adjusted taxable income. 

View the proposed rule.

View the FAQs.