Section 163(j) and Form 8990 (1040)

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Overview

This article provides information about how to file Form 8990 in UltraTax CS/1040.

Form 8990

Form 8990 calculates the business interest expense deduction and carryover amounts.The form utilizes the section 163(j) limitation on business interest expenses in coordination with other limits. For more information on the filing requirements and calculations, see the Form 8990 instructions External link . (What's this?)

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Section 163(j)

Under the Tax Cuts and Jobs Act (TCJA), section 163(j) has been amended to reflect a limitation on the deduction for business interest expense for certain taxpayers in tax years beginning after 2017. To see answers to common questions about the section 163(j) limitation, visit this IRS resource: Basic questions and answers about the limitation on the deduction for business interest expense External link

Data entry in UltraTax CS

With the 2018.3.8 release of UltraTax CS, Form 8990 is a calculating form. Prior to the update, Form 8990 was only available in the Non Calculating folder. If there is any information entered on the non calculating form, that will supersede the calculating version. To clear the non calculating form, go to the Non Calculating input folder, click 8990 in the list of forms, and choose Edit > Delete Screen Data.

Non Calculating form

To complete the non calculating version of this form, go to the Non Calculating input folder, click 8990 in the list of forms, and enter the amounts directly onto the form. With non calculating forms, information will not data share onto the form from pass-through entities. For more information about working with non calculating forms, see the Non-calculating forms overview.

If you have any data entered on the non calculating version of the form, it will override the UltraTax CS 8990 calculations when you e-file.

Calculating form

Before entering data to calculate Form 8990, make sure the non calculating form is blank. Go to the Non Calculating input folder, click the 8990 and choose Edit > Delete Screen Data. Then, use the following input screens to calculate the form: 

Calculations

Partners not subject to 163(j): For partners with Schedule K-1, Code 13K Excess Business Interest Expense who are not subject to section 163(j), UltraTax CS completes Form 8990, Page 3, Schedule A – Summary of Partner’s Section 163(j) Excess Items. The allowed amount of excess interest expense will be computed after applicable basis, at-risk and passive limitations. Any excess business interest expense not allowed will be carried to next year.

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