Section 199A Resource Listing
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Business Interest Limitation Under 163(j)—Unresolved Issues

On Feb. 21, AICPA sent a letter to the IRS requesting guidance on many areas associated with Section 163(j). These include:


1.        Definition of interest expense

2.       Aggregation/consolidation of groups

3.       Allocation rules

4.       Ordering rules, including whether Section 163(j) is a method of accounting

5.       Interaction between Sections 163(j) and 108 (discharge of indebtedness)

6.       Partnership related items—tiered partnerships, disposition of partnership interests

7.       International items

8.       Small business relief from tax shelter definition


Some of these items only affect a small number of taxpayers, but some affect a great many taxpayers. The letter is comprehensive with 51 pages. All practitioners with affected clients should be aware of the major issues during this filing season.



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