IRS Updates FAQs on Interest Deductibility for New Law’s Changes

The IRS updated its list of answers to frequently asked questions on the limitation on business interest deductibility to address changes made by the GOP’s giant tax-and-spending law this summer.

The agency provided new or updated answers Tuesday addressing the law’s changes under Section 163(j), which essentially limits companies’ deductions of their interest payments to 30% of their adjusted taxable income.

The updates address the gross-receipts threshold under which a company becomes subject to the limit; how business interest is defined; and the carryforward of nondeductible interest, among other matters.

The tax-and-spending law effectively raised the cap by allowing ...