Page 99 - Large Business IRS Training Guides

Example 1 - Gross Receipts Test

Parent Subsidiary Controlled Group (cont’d)

Result:

• A and B are members of a parent-subsidiary

controlled group, and must aggregate gross

receipts for purposes of IRC § 448(c) and the

small business exemption in Prop. Treas. Reg.

§ 1.163(j)-2(d).

• A and B are considered having $36M in average

annual gross receipts for 20X4.

• A and B must separately apply IRC § 163(j) to

determine any limitation on the deduction for

business interest expense.

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