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IRC § 163(j) Limitation Applied to Controlled
Foreign Corporations (CFCs)
• Section 1.163(j)-7* of the proposed regulations
provide guidance on applying IRC § 163(j) rules
to CFCs.
• IRC § 163(j) would apply to a CFC’s business
interest expense in the same manner as those
rules apply to a domestic C corporation.
• CFC group election – provides an alternative
approach for computing the deduction for
business interest expense of a CFC group.
* There may be potential changes in the final
regulations to the proposed rules in this area 149
