Business Interest Expense Is Limited for Larger Businesses

question 889

Multiple Choice

Business interest expense is limited for larger businesses. Which of the following statements is not correct with respect to this limitation?

• A) Businesses will add back depreciation and amortization deductions to the taxable income in order to calculate the maximum interest deduction.
• B) The interest expense deduction is limited to business interest income plus 30% of adjusted taxable income.
• C) Businesses with current year gross receipts exceeding $10 million are subject to this limitation.
• D) All of the above statements are accurate statements with respect to calculating the interest expense limitation.

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Definitions:

Metamorphic Rock

Rock that was once one form of rock but has changed to another under the influence of heat, pressure, or some other agent without passing through a liquid phase.

Heat And Pressure

The combination of high temperature and force applied to a material, often leading to physical or chemical changes.

Igneous Rock

Rock formed through the cooling and solidification of magma or lava, foundational to the Earth's crust.

Subsurface Mining

A method of extracting minerals and ores from beneath the earth's surface, involving tunnels or shafts, as opposed to open-pit or surface mining.