IRS Issues Proposed Regulations for Business Interest Expense Deduction
The Internal Revenue Service issued a notice of proposed rulemaking today for a provision of last year’s tax reform legislation that limits the business interest expense deduction for certain taxpayers. Real estate trades or businesses have the ability to elect out of the limitation, but certain property would then be subject to the alternative depreciation system. The limit doesn’t apply to taxpayers whose average annual gross receipts are $25 million or less for three prior tax years. Comments will be accepted for 60 days after the proposed regulations are published in the Federal Register.