Page 190 - Large Business IRS Training Guides

S Corporation Shareholder

• The deductible business interest expense of the

S corporation is not subject to further limitation under

IRC § 163(j) by the shareholders.

• For a shareholder subject to the IRC § 163(j) limitation, the

shareholder’s current year IRC §163(j) limitation computation

will include the following applicable amounts from each of its

S corporations that are subject to IRC § 163(j):

• Current year excess taxable income (ETI), and

• Current year excess business interest income (EBII).

• These amounts will not include items from an excepted

trade or business.

120