The IRS updated its fact sheet regarding changes to the limitation on the deduction for business interest expense under the One Big Beautiful Bill Act.
For tax years beginning after Dec. 31, 2024, OBBB amended Section 163(j) by:
- Allowing taxpayers to add back deductions for depreciation, amortization, or depletion when calculating Adjusted Taxable Income.
- Expanding the definition of floor plan financing interest to treat, as a motor vehicle, any trailer or camper designed to provide temporary living quarters for recreational, camping or seasonal use and designed to be towed by, or affixed to, a motor vehicle.
Fact Sheet 2025-09 provides answers to some basic questions about the limitation on the deduction for business interest expense, also known as the "section 163(j) limitation." See the FAQ.