How much interest expense can be deducted

Reference no: EM132218310

Question - For 2018, UNA Corporation has $500,000 of adjusted taxable income, $22,000 of business interest income, and $120,000 of business interest expense. It has average annual gross receipts of more than $25 million over the prior three taxable years. Interest expense deduction for 2018 is 120,000. Beginning in 2018, the TCJA of 2017 disallows a number of other expenditures that were previously deductible. Net interest expense is limited and any disallowed interest is carried forward indefinitely. The limitation does not apply to businesses that have annual average gross receipts of $25 million or less during the prior three taxable years.

How much interest expense can be deducted for 2018 if UNA's adjusted taxable income is $300,000?

Reference no: EM132218310

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