Describe the computation of the limit placed on the business interest deduction. Is the disallowed interest...

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Accounting

Describe the computation of the limit placed on the businessinterest deduction. Is the disallowed interest ever deductible.Please explain in detail.

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PART A Business Interest Deduction Businesses are allowed to deduct any interest paid or accrued on debt that is properly allocable to a trade or business and is not considered investment income Historically this interest deduction has not been subject to many limitations Computing the limitation Prior to 2018 taxpayers could generally deduct business interest subject to a few relatively uncommon exceptions Effective for tax years starting in 2018 a taxpayers deduction for net business interest is limited to 30 percent of adjusted taxable income which is taxable income without taking into account Nonbusiness income like gains from the sale of assets held for investment Business interest expense or business interest income Net operating loss deductions The new 20 percent qualified business income deduction Depreciation amortization or depletion The limitation See Answer

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