New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Overview

This article provides information about how UltraTax CS/1065 calculates Form 8990, Limitation on Business Interest Expense Under Section 163(j).

Section 163(j) Election

IRC section 163(j) was amended under the 2017 Tax Cuts and Jobs Act (TCJA) to reflect a new limitation on the deduction for business interest expense for certain taxpayers in tax years beginning after 2017.

Enter X in the field Section 1.163(j)-9 election was made for an excepted trade or business on Screens Inc, F, 4835, and Rent if the corporation has made an election under section the corporation has made an election under section 1.163(j)-9 in the prior year, or is making the election in the current year. UltraTax CS proformas X to this field when a 1 was entered in the Meets criteria for excepted trade or business under Section 163(j) field in the prior year.

Assets

Proforma

Form 8990

The section 163(j) business interest expense deduction and carryover amounts are reported on Form 8990. The form calculates the section 163(j) limitation on business interest expenses in coordination with other limits. Refer to the Form 8990 instructions for more information on the filing requirements and calculations.

Data entry and printing

To calculate and print Form 8990, use the following input screens and fields.

• Enter general information related to the business interest expense limitation on Screen 8990 in the Schedule K folder. There, you can also enter business interest expenses and income, taxable income, prior year gross receipts, Partnership pass-through items, and Schedule B information related to the calculation of Form 8990.
• Use the Business interest expense subject to limitation field on Screen Inc, Screen F-2, Screen 4835-2, and Screen Rent to indicate the portion of interest expense that qualifies as business interest expense for Form 8990.

  Note: The Allocation of Business Interest Expense worksheet is available on the last page of the Form 8990 in Form view.

To stop Form 8990 from printing, see the "Excepted trade or business" and the "Small business taxpayer" sections below.

Excepted trade or business

Enter data in the Section 1.163(j)-9 election statement dialog in Screen Elect in the Elections folder to make the election in the current year. If the taxpayer’s only interest expense is from an excepted trade or business, the taxpayer is not required to file Form 8990. For more information on what types of trades or business are excepted, see the Form 8900 instructions.

Enter X if an election under section 1.163(j)-9 was made in the prior year, or if an election is being made in the current year. UltraTax CS proformas X to this field when a 1was entered in the Meets criteria for excepted trade or business under Section 163(j) field in the prior year. See 1065-US: Excepted trade or business under Section 163(j) for more information.

Small business taxpayer

To indicate that the taxpayer is a small business taxpayer, complete the Small business taxpayer fields, on the 8990 screen. If there is no excess business interest expense in the return passed-through from another partnership, marking the field will stop Form 8990 from printing. If there is business interest expense passed-through from another partnership, Form 8990 will calculate per the instructions and print.

Partner's Schedule K-1 and Form 8990

UltraTax CS always reports gross receipts on Schedule K-1, line 20AG.

If the interest expense from an exempt Partnership, adjusted taxable income and business interest income for business interest expense won't be reported on Schedule K-1, Other Information. Based on Regulation 1.163(j)-6(m), the interest expense from an exempt Partnership is not subject to further limitation under Section 163(j). The partner’s share of the Partnership’s business interest expense, adjusted taxable income, and business interest income is no longer included on the Form 8990 filed by the partner.

Was this article helpful?

Yes No

Submit