IRS provides guidance on business interest limitation elections

The IRS provided guidance in Rev. Proc. 2026-17 on the withdrawal of elections to be excepted trades or businesses under Sec. 163(j)(7) for purposes of the business interest limitation and to make a late election under Sec. 168(k)(7) to be exempt from bonus depreciation.

The guidance is in response to changes made by H.R. 1, commonly known as the One Big Beautiful Bill Act, to again allow taxpayers to deduct depreciation and amortization in calculating the Sec. 163(j) business interest limitation and making 100% bonus depreciation permanent.

Additionally, the revenue procedure provides guidance that allows a taxpayer to revoke or make a controlled foreign corporation group election without regard to the 60-month limitation for the first specified period of a specified group beginning after Dec. 31, 2024. Read more.