Sec. 2306. Modifications of limitation on business interest
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/bill/116/hr/748/enr/section-2306·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 163(j) of the Internal Revenue Code of 1986 is amended by redesignating paragraph
(10)as paragraph
(11)and by inserting after paragraph
(9)the following new paragraph: Except as provided in clause
(ii)or (iii), in the case of any taxable year beginning in 2019 or 2020, paragraph (1)(B) shall be applied by substituting 50 percent for 30 percent . In the case of a partnership— clause
(i)shall not apply to any taxable year beginning in 2019, but unless a partner elects not to have this subclause apply, in the case of any excess business interest of the partnership for any taxable year beginning in 2019 which is allocated to the partner under paragraph (4)(B)(i)(II)— 50 percent of such excess business interest shall be treated as business interest which, notwithstanding paragraph (4)(B)(ii), is paid or accrued by the partner in the partner's first taxable year beginning in 2020 and which is not subject to the limits of paragraph (1), and 50 percent of such excess business interest shall be subject to the limitations of paragraph (4)(B)(ii) in the same manner as any other excess business interest so allocated. A taxpayer may elect, at such time and in such manner as the Secretary may prescribe, not to have clause
(i)apply to any taxable year. Such an election, once made, may be revoked only with the consent of the Secretary. In the case of a partnership, any such election shall be made by the partnership and may be made only for taxable years beginning in 2020. Subject to clause (ii), in the case of any taxable year beginning in 2020, the taxpayer may elect to apply this subsection by substituting the adjusted taxable income of the taxpayer for the last taxable year beginning in 2019 for the adjusted taxable income for such taxable year. In the case of a partnership, any such election shall be made by the partnership. If an election is made under clause
(i)for a taxable year which is a short taxable year, the adjusted taxable income for the taxpayer’s last taxable year beginning in 2019 which is substituted under clause
(i)shall be equal to the amount which bears the same ratio to such adjusted taxable income determined without regard to this clause as the number of months in the short taxable year bears to 12 . The amendments made by this section shall apply to taxable years beginning after December 31, 2018.