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Treasury and the IRS on January 5 released final regulations under Section 163(j) (the 2021 final regulations).  The regulations finalize, with certain key changes and reservations, proposed regulations published in the Federal Register on September 14, 2020 (the 2020 proposed regulations).  Section 163(j), which was modified by the 2017 tax reform legislation and the CARES Act, generally limits US business interest expense deductions to the sum of business interest income, 30% (or 50%, as applicable) of adjusted taxable income, and the taxpayer’s floor plan financing interest for the tax year.

PwC professionals will discuss the new regulations on an upcoming Tax Readiness webcast on Tuesday, January 26th.