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TCJA

Section 163(j)

The following information describes how UltraTax CS/1065 calculates Form 8990, Limitation on Business Interest Expense under Section 163(j).
IRC section 163(j) was amended under the 2017 Tax Cuts and Jobs Act (TCJA) to reflect a new limitation on the deduction for business interest expense for certain taxpayers in tax years beginning after 2017.
Enter
X
 in the field
Section 1.163(j)-9 election was made for an excepted trade or business
 on the Inc, F, 4835, and Rent screens if the corporation has made an election under section 1.163(j)-9 in the prior year, or is making the election in the current year. UltraTax CS proformas
X
 to this field when you enter a
1
 in the
Meets criteria for excepted trade or business under Section 163(j)
 field in the prior year.
You can calculate mass change of use for prior-year assets for activities that made the election under code section 163(j)(7)(B) or (C), by using the Mass Change of Use when electing 163(j) window. To open the screen, go to the Asset tab for an activity, select
Tasks
, then
Mass Change of Use when Electing 163(j)
.
We updated the field
Meets criteria for excepted trade or business under Section 163(j)
 on the Inc, F, 4835, and Rent screens to
Section 1.163(j)-9 election was made for an excepted trade or business
 in 2019 UltraTax CS.
In the prior year, a
1
 entered in the
Meets criteria for excepted trade or business under Section 163(j)
 field indicated the election under Section 1.163(j)-9 was made for the activity and the interest expense wasn't subject to the Section 163(j) limitation. UltraTax CS proformas an
X
 to the
Section 1.163(j)-9 election was made for an excepted trade or business
 field to indicate the election was made in the prior year. The interest expense for that activity won't be subject to the Section 163(j) limitation.
A
2
 entered in the
Meets criteria for excepted trade or business under Section 163(j)
 field in the prior year indicated the election under Section 1.163(j)-9 wasn't made for the activity. The interest expense could have been subject to the Section 163(j) limitation if the taxpayer didn't meet the small business taxpayer threshold. On proforma, UltraTax CS leaves the
Section 1.163(j)-9 election was made for an excepted trade or business
 field blank, which indicates that the election wasn't made in the prior year. The interest expense for that activity could be subject to limitation in the current year if the taxpayer doesn't meet the small business taxpayer threshold.
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