Page 125 - Large Business IRS Training Guides

Interest for Purposes of IRC § 163(j) Overview

Proposed Regulations provide a broad definition

of interest:

• Amounts paid or accrued as compensation for the use

or forbearance of money under the terms of an

instrument or contractual arrangement (conventional

interest).

• The time value component associated with the loan

transaction relating to certain swaps with significant

nonperiodic payments.

• Certain amounts that are closely related to interest

(interest equivalents) and affect the economic yield or

cost of borrowing of a transaction involving interest.

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