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Excess Business Losses and Interest Disallowance

Overview

Excess Business Losses

  • Married Filing Joint - Applicable if losses are $500K or more - inflation adjusted
  • Others - Applicable if losses are $250K or more - inflation adjusted
  • Effective 2021 through 2026

Interest Disallowance

  • Applies to taxpayers (other than tax shelters) with average gross receipts for the three prior years of more than $29 million (2023)

Related IRC and IRS Publications and Forms

  • IRC Sec. 461(l) - Excess Business Losses
  • IRC Sec. 163(j) - Disallowance of Business Interest
  • Form 461 - Limitation on Business Losses
  • Form 8990 - Limitation on Business Interest Expense

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