The Tax Cuts and Jobs Act (TCJA) of 2017 imposed a new limit on the deductibility of net business interest expense beginning with the 2018 tax year. Starting with tax year 2022, the limitation has tightened for real estate businesses as depreciation and amortization are no longer added back to adjusted taxable income (ATI) in computing the limitation amount. Along with rising interest rates, the change means that many taxpayers that have not been subject to the limit in prior years may experience an interest expense limitation in 2022 and thereafter.

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