![]() Like-kind exchange treatment applies to certain exchanges of real, personal or intangible property. ![]() Disallowed interest above the limit may be carried forward indefinitely, with special rules for partnerships. ![]() There are some exceptions to the limit, and some businesses can elect out of this limit. Generally, for businesses with 25 million or less in average annual gross receipts, business interest expense is limited to business interest income plus 30% of the business’s adjusted taxable income and floor-plan financing interest ![]() The change limits deductions for business interest incurred by certain businesses. Interest above the limit can be carried forward indefinitely. The deduction for net interest is limited to 50% of adjusted taxable income for firms with a debt-equity ratio above 1.5. New limits on deduction for business interest expenses Notice 2018-76 PDF provides additional information on these changes. If provided during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment, or the cost of the food or beverages must be stated separately from the cost of the entertainment on one or more bills, invoices, or receipts. The meals may be provided to a current or potential business customer, client, consultant or similar business contact. However, under the new law, taxpayers can continue to deduct 50% of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The TCJA generally eliminated the deduction for any expenses related to activities considered entertainment, amusement or recreation. Limits on deduction for meals and entertainment expensesĪ business can deduct up to 50% of entertainment expenses directly related to the active conduct of a trade or business or incurred immediately before or after a substantial and bona fide business discussion. Limits apply based on income and type of business. This new provision, also known as Section 199A, allows a deduction of up to 20% of qualified business income for owners of some businesses. New deduction for qualified business income of pass-through entities
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