Definition of Adjusted Taxable Income for Business Interest Limitation
Section 70342 · Sec. 70342 ·
What this chapter is about
This part adds certain foreign income amounts to a tax figure. That figure sets how much interest a business may deduct. The change starts with tax years after December 31, 2025.
“the amounts included in gross income under sections 951(a), 951A(a), and 78 (and the portion of the deductions allowed under sections 245A(a) (by reason of section 964(e)(4)) and 250(a)(1)(B) by reason of such inclusions), and”
The section adds a new clause (vi) to subparagraph (A) of section 163(j)(8) of the Internal Revenue Code of 1986 bringing into adjusted taxable income the amounts included in gross income under sections 951(a), 951A(a) and 78, together with the part of the deductions allowed under section 245A(a) by reason of section 964(e)(4) and under section 250(a)(1)(B) by reason of those inclusions.
What the document actually says
“the amounts included in gross income under sections 951(a), 951A(a), and 78 (and the portion of the deductions allowed under sections 245A(a) (by reason of section 964(e)(4)) and 250(a)(1)(B) by reason of such inclusions), and”
That sentence, in plain words
Amounts counted as income under three tax rules are named. Part of two deductions tied to them is named too.
What this is about
All of it goes into a tax figure. That figure sets how much interest a business may deduct. The tax code is not indexed here.
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The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70342 in the PDF
What the document says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
The section applies its amendments to taxable years beginning after December 31, 2025.
What the document actually says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
That sentence, in plain words
The changes start with tax years that begin after December 31, 2025.
What this is about
Earlier tax years are not touched. The old rules still hold for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Both things the section does: add the new clause to the definition of adjusted taxable income, and fix the effective date.
The mechanical edit striking an and at the end of the clause before it.
The section works by amending section 163(j)(8)(A) of the Internal Revenue Code of 1986 and points to sections 78, 245A, 250, 951 and 951A, none of which is indexed here.
