IRS Guidance Allows Taxpayers to Withdraw Section 163(j) Election

Friday, April 10, 2020 - 3:15pm

The Internal Revenue Service provided guidance today that allows taxpayers to withdraw a previously irrevocable election related to the deductibility of business interest expense under Internal Revenue Code Section 163(j). Under Rev. Proc. 2020-22, taxpayers who operate as a real property trade or business have until Oct. 15, 2021, to withdraw their election for their 2018, 2019 and 2020 tax returns. A provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act increased the allowable interest deduction from 30 percent to 50 percent for 2019 and 2020, and the revenue procedure allows taxpayers to withdraw their election avail themselves of the new provision.