Page 122 - Large Business IRS Training Guides

Floor Plan Financing Interest Expense

Floor plan financing interest expense: Interest paid or accrued on

floor plan financing indebtedness.

Floor plan financing indebtedness: Indebtedness that is used to

finance the acquisition of motor vehicles held for sale or lease and that

is secured by the acquired inventory.

Motor vehicle: A motor vehicle that is any of the following: (1) any

self-propelled vehicle designed for transporting persons or property on

a public street, highway, or road; (2) a boat; (3) farm machinery or

equipment.

Property is ineligible for bonus depreciation if it is used in a trade

Note: or business that has floor plan financing indebtedness and the

associated floor plan financing interest expense is taken into

account under IRC § 163(j). IRC §168(k)(9)(B).

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