IRS Considering the Definition of a “Trade or Business” under Section 163(j)

The IRS is in the process of defining a “trade or business” for purpose of determining what counts as business interest for the purposes of section 163(j). The text of the statute and Notice 2018-28 indicate that all income earned by a corporation is business interest, but questions still remain on whether a corporation that receives only passive dividend income is a business and whether interest paid by a partnership in which a C corporation is a partner should necessarily be classified as business interest.

Read more: IRS Weighing Definitions of “Trade or Business,” “Business Interest”

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