Treasury releases proposed Section 163(j) regulations

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November 2018

Overview

Today, the Treasury Department released proposed regulations under Section 163(j). Section 163(j), which was modified by the 2017 tax reform act, limits US business interest expense deductions to the sum of business interest income, 30% of adjusted taxable income (ATI), and the taxpayer’s floor plan financing interest for the tax year.

The regulations contain 181 pages of preamble language and 258 of statutory text. Public comments on the proposed regulations are due 60 days after publication in the Federal Register. The proposed regulations contain effective dates that are tied to the date of publication in the Federal Register.

PwC will publish a detailed analysis of the proposed regulations within the coming days.  In addition, we will discuss the Section 163(j) guidance in an upcoming Tax Reform Readiness Series webcast.

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Michael DiFronzo

Partner, Washington National Tax Services ITS Leader, PwC US

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