Ralph borrowed $4 million and used the proceeds in his Internet business. The interest on this debt is not subject to an interest limitation if Ralph's business has average annual gross receipts of $26 million or less for the prior three taxable years.

Question

Quizplus · Accepted Answer

The statement is true according to the tax code. If Ralph's business has average annual gross receipts of $26 million or less for the prior three taxable years, the interest on his debt is not subject to an interest limitation.

Ralph Borrowed $4 Million and Used the Proceeds in His