Page 114 - Large Business IRS Training Guides

Allocating Interest Expense –

Activity based allocations

Other interest expense (including business interest

expense) must be allocated between each activity

for purposes of at risk (IRC § 465) and passive

activity loss (IRC § 469) limitations.

• Applies to all taxpayers subject to IRC §§ 465 or

469.

• This is necessary to compute Adjusted Taxable

Income (ATI).

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