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Ordering Rules
• Provisions that characterize interest expense as
something other than business interest expense (ex: IRC
§ 163(d)) govern the treatment of that expense.
• IRC § 163(j) generally applies after provisions that
subject interest expense to disallowance, deferral,
capitalization, or other limitation.
• But there are exceptions. For example, IRC § 163(j)
applies before the loss limitation rules of IRC §§ 465
and 469. See Prop. Treas. Reg. § 1.163(j)-3 for a
more complete list of exceptions.
In conclusion: IRC § 163(j) is usually at the end of the line.
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