What’s New

Changes to adjusted taxable income (ATI) and busi- ness interest limitations. P.L. 119-21, commonly known as the One Big Beautiful Bill Act, amended section 163(j) to allow an add-back to taxable income for any deduction allowable for depreciation, amortization, or depletion to determine ATI for tax years beginning after 2024. Form 8990, line 11 has been revised to reinstate the deduction allowable for depreciation, amortization, or depletion attributable to a trade or business as an adjustment to tentative taxable income for purposes of computing ATI. See the instructions for Line 11, later.

For tax years beginning after 2025, limitations on business interest will generally include capitalized interest except for interest capitalized under sections 263(g) and 263A(f). Also, ATI will exclude U.S. shareholder inclusions from controlled foreign corporations (CFCs).

Floor plan financing interest expense. For tax years beginning after 2024, P.L. 119-21 also expanded the definition of floor plan financing interest expense to include any trailer or camper, which is designed to provide temporary living quarters for recreational, camping, or seasonal use, and is designed to be towed by or affixed to a motor vehicle.