Which of the following is a true statement about the limitation on business interest deductions?
A)Interest disallowed by this limitation is carried back three years and then forward five years.
B)The limitation is calculated as a percentage of the taxpayer's total taxable income.
C)This limitation is not imposed on businesses with average annual gross receipts of $25 million or less for the prior three taxable years.
D)All of the choices are false.
E)All of the choices are true.

Question

Quizplus · Accepted Answer

The limitation on business interest deductions does not apply to businesses with average annual gross receipts of $25 million or less for the prior three taxable years. Option A is false as interest disallowed by this limitation is carried forward indefinitely, not just for eight years. Option B is false as the limitation is calculated as a percentage of the taxpayer's adjusted taxable income, not total taxable income. Option D and E are both incorrect, as Option C is true.

Which of the Following Is a True Statement About the Limitation