Limitations on Business Interest Expense and Adjustments Required by Changes in Method of Accounting

For purposes of determining the limitation on business interest expense under IRC section 163(j)(8), a IRC section 481(a) adjustment from a change in a depreciation method of accounting is treated as depreciation in the calculation of Adjusted Taxable Income. The result is the same regardless if the adjustment is negative or positive, is an adjustment in the year of change or spread over four years. For more detailed information follow the link CCA 202123007