Section III—Business Interest Income

Line 22. Adjusted taxable income (ATI). If line 22 is zero or less, enter zero. However, CFC group members should follow instructions below.

For example, gain from the sale of a taxpayer’s personal residence would be entered on line 17 because it is not gain that is allocable to a trade or business of the taxpayer.

Do not include amounts from pass-through entities, which will be entered on line 19.

Line 18. Any business interest income not from a pass-through entity. Enter all business interest income, to the extent included in tentative taxable income on line 6, that is not from a pass-through entity (regardless of whether the entity is subject to the section 163(j) limitation).

Line 19. Amount of any income or gain items from a pass-through entity. Enter the amount of any income or gain items from pass-through entities.

Line 20. Other reductions. Include floor plan financing interest expense.

For tax years through 2024, ATI is computed with deductions for depreciation, amortization, depletion, and any other deduction prescribed in published guidance.

If you are filing Form 8990 for an applicable CFC, include the amount of any related party dividend income. See Regulations section 1.163(j)-7(g)(2).

Line 23. Current year business interest income. Enter the amount of business interest income directly paid to or accrued by the taxpayer. This does not include interest income from excepted trades or businesses.

For C corporations with an interest in a partnership, any investment interest income allocated to the C corporation is treated as business interest income of the C corporation from a non-excepted trade or business.

See Ownership of pass-through entities not subject to the section 163(j) limitation , earlier.