Further Analysis into 2020 Proposed Regulations for Section 163(j)

The recently issued new proposed regulations in July 2020 regarding the Section 163(j) business interest limitation are significantly focused on providing additional clarity and guidance around application of this provision in the case of flowthrough entities such as partnerships and S-corporations.

Taxpayers operating as a flow-through entity or having an ownership interest in a flow-through entity will want to familiarize themselves with the key flow-through rules of the proposed regulations, some of which are summarized below.

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