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 $25 million or less for the prior three taxable years.

Question

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According to the IRS, if Ralph's business has average annual gross receipts of $25 million or less for the prior three taxable years, the interest on his debt is not subject to an interest limitation. Therefore, the statement "the interest on this debt is not subject to an interest limitation if Ralph's business has average annual gross receipts of $25 million or less for the prior three taxable years" is true.

Ralph Borrowed $4 Million and Used the Proceeds in His