On July 28, 2020, the Treasury Department and the IRS issued final and proposed regulations (the “Final Regulations” and “New Proposed Regulations”) under Section 163(j) of the Internal Revenue Code (the “Code”). The Final Regulations and New Proposed Regulations amend prior proposed regulations issued on November 26, 2018 (the “Prior Proposed Regulations”). Section 163(j) of the Code generally limits business interest expense deductions and was substantially revised by the Tax Cuts and Jobs Act (the “TCJA”), which took effect on January 1, 2018. Section 163(j) was further revised by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. Our coverage of the TCJA and the CARES Act can be found here and here, respectively. Certain key tax provisions of the CARES Act can be found here.

This client alert provides a high-level overview of some of the key guidance on Section 163(j) contained in the newly released regulations.

Please click here to read the full client alert.