How Not to Lose Interest Deductions for Your Business -Planning Strategies
TYPES OF DEDUCTIBLE, PARTIALLY OR NON-DEDUCTIBLE INTEREST
Before 1987, deducting interest was not only more liberal, but was also much simpler. Save for a couple of exceptions, any type of interest was tax deductible with generally no limit on the amount of the deduction.
Today, deducting interest is neither automatic nor simple. Under complex rules [IRC 163(h)] the tax treatment of interest can range from fully deductible to partially deductible to not deductible at all, depending on the category of interest.
A list of these interest categories appears below followed by a further discussion of each category.
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