Sec. 2306. MODIFICATIONS OF LIMITATION ON BUSINESS INTEREST
549 words·~2 min read·
/statute-compilations/comps-15754/sec-2306A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
## SEC. 2306 MODIFICATIONS OF LIMITATION ON BUSINESS INTEREST ###
(a)In General **[**[26 U.S.C. 163](/us/usc/t26/s163)**]** Section 163(j) of the Internal Revenue Code of 1986is amended by redesignating paragraph
(10)as paragraph
(11)and by inserting after paragraph
(9)the following new paragraph: > > #### “(10) Special rule for taxable years beginning in 2019 and 2020 > > > ##### “(A) In general > > > ###### “(i) In general > > 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’. > > > ###### “(ii) Special rule for partnerships > > In the case of a partnership— > > > ###### “(I) > > clause
(i)shall not apply to any taxable year beginning in 2019, but > > > ###### “(II) > > 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)— > > > ###### “(aa) > > 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 > > > ###### “(bb) > > 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. > > > ###### “(iii) Election out > > 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. > > > ##### “(B) Election to use 2019 adjusted taxable income for taxable years beginning in 2020 > > > ###### “(i) In general > > 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. > > > ###### “(ii) Special rule for short taxable years > > 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” > . ###
(b)Effective Date **[**[26 U.S.C. 163](/us/usc/t26/s163)**]** The amendments made by this section shall apply to taxable years beginning after December 31, 2018.
Connectionstraces to 1
Traces to 1 document
U.S. Code
Citation graph
cites case law
Sec. 2306
MODIFICATIONS OF LIMITATION ON BUSINESS INTEREST
Cites 1Cited by 0 across 0 sources