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- Form 8990 calculates how much business interest expense you can deduct under Section 163(j).
- Deductions are generally capped at business interest income plus 30% of adjusted taxable income.
- Corporations, partnerships, S corporations, and certain trusts usually file unless small business exemptions apply.
- Disallowed interest is not lost; it carries forward to future tax years.
- Mistakes in adjusted taxable income or carryforwards often trigger amended returns or IRS notices.
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