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Business interest expense deduction limitations under section 163(j), regulations released to Federal Register

Business interest expense deduction limitations

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register final regulations (T.D. 9905) and a notice of proposed rulemaking (REG-107911-18) under section 163(j) concerning the limitation on deductions for certain business interest expenses.

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The regulations reflect changes made by the 2017 tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)—and statutory amendments made by the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136).

Read the final regulations [PDF 1.17 MB] (569 pages)

Read the proposed regulations [PDF 614 KB] (285 pages)

The final and proposed regulations are scheduled to be published in the Federal Register on September 14, 2020.
 

Comparing today’s versions of final and proposed regulations against versions released by IRS in July 2020

The IRS on July 28, 2020, posted versions of these final and proposed regulations on the IRS website. Those versions of the final and proposed regulations include the following statement:

This document has been submitted to the Office of the Federal Register (OFR) for publication and is currently pending placement on public display at the OFR and publication in the Federal Register. The version of the [regulations] released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

These are unofficial documents produced by KPMG that are intended to show what changes, if any, were made to the regulations prior to being released to the Federal Register for publication. These KPMG documents have not been reviewed for accuracy.

The purpose of this report is to provide text of the regulations. A discussion of differences  (that is, differences between the versions released by the IRS in July 2020 and the versions released this afternoon) will be provided in a future report from KPMG.

Read KPMG’s report of initial impressions of the section 163(j) regulations based on the July 2020 versions. 

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