,i #aac? ,,congress #b;d ,session ,h4 ,r4 #eddd ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,septemb] #aj1 #bjad ,mr4 ,pocan introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to limit ! int]e/ d$uction = excessive int]e/ ( memb]s ( f9ancial report+ gr\ps4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,corporate ,fair ,%>e ,tax ,act4 #b4 ,limitation on int]e/ d$uction = excessive int]e/ ( memb]s ( f9ancial report+ gr\ps 7a7 ,9 g5]al ,section #afc ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7n7 z subsection 7o7 & by ins]t+ aft] subsection 7m7 ! foll[+3 7n7 ,limitation on excessive int]e/ ( memb]s ( f9ancial report+ gr\ps 7#a7 ,limitation 7,a7 ,9 g5]al ,if ?is subsection applies to any corporation = any taxable ye>1 no d$uction %all be all[$ "u ?is *apt] = ! taxable ye> = int]e/ exp5se to ! ext5t t su* exp5se exce$s ! sum (-- 7i7 ! am\nt ( int]e/ on indebt$ness ( ! corporation includible 9 ! corporation's gross income = ! taxable ye>1 plus 7ii7 ! corporation's proportionate %>e ( ! f9ancial report+ gr\p's net int]e/ exp5se = ! taxable ye> comput$ "u ,unit$ ,/ates income tax pr9ciples4 7,b7 ,proportionate %>e ( net int]e/ exp5se ,= purposes ( subp>agraph 7,a77ii7-- 7i7 ,9 g5]al ,a corporation's proportionate %>e ( ! f9ancial report+ gr\p's net int]e/ exp5se means ! am\nt equal to ! p]c5tage ( ! gr\p's net int]e/ exp5se :i* be>s ! same p]c5tage z ! corporation's e>n+s be>s to ! gr\p's e>n+s4 7ii7 ,e>n+s ,= purposes ( clause 7i71 e>n+s %all be ! sum ( net e>n+s plus net int]e/ exp5se1 taxes1 depreciation1 & amortization4 7iii7 ,det]m9ations relat+ to e>n+s ,= purposes ( clause 7ii71 e>n+s1 net int]e/ exp5se1 taxes1 depreciation1 & amortization ) respect to a f9ancial report+ gr\p %all be z reflect$ on ! f9ancial report+ gr\p's f9ancial /atem5ts = ! taxable ye> end+ 9 ! taxable ye> ( ! corporation4 7,c7 ,alt]native det]m9ation ,9 lieu ( ! limitation 9 subp>agraph 7,a71 if-- 7i7 a corporation fails to sub/antiate ! corporation's proportionate %>e ( ! f9ancial report+ gr\p's net int]e/ exp5se = a taxable ye>1 or 7ii7 a corporation s elects1 no d$uction %all be all[$ "u ?is *apt] = ! taxable ye> = int]e/ exp5se to ! ext5t t su* exp5se exce$s #aj p]c5t ( ! corporation's adju/$ taxable income 7z def9$ "u subsection 7j77#f77;,a774 7#b7 ,corporations to :i* subsection applies 7,a7 ,9 g5]al ,?is subsection %all apply to any corporation = any taxable ye> if ! corporation is a memb] ( a f9ancial report+ gr\p4 7,b7 ,c]ta9 corporations n includ$ ,?is subsection %all n apply to any corporation :i*-- 7i7 is a corporation pr$om9antly engag$ 9 ! active conduct ( a bank+1 f9anc+1 or simil> bus9ess1 or 7ii7 has less ?an #e1jjj1jjj ( net int]e/ exp5se = ! taxable ye>4 7,c7 ,f9ancial report+ gr\p ,= purposes ( subp>agraph 7,a71 ! t]m f9ancial report+ gr\p means a gr\p t prep>es consolidat$ f9ancial /atem5ts 9 accordance ) ,unit$ ,/ates g5]ally accept$ acc\nt+ pr9ciples1 int]national f9ancial report+ /&>ds1 or o!r me?od au?oriz$ by ! ,secret>y ( ! ,treasury "u regulations4 ,su* t]m %all n include any corporation describ$ 9 subp>agraph 7,b77i74 7,d7 ,subgr\ps ,= purposes ( ?is subsection1 all memb]s ( an exp&$ affiliat$ gr\p 7z def9$ 9 section #ghgd7;c77#a77 %all be treat$ z #a corporation4 7#c7 ,net int]e/ exp5se ,! t]m net int]e/ exp5se has ! mean+ giv5 su* t]m by subsection 7j77#f77;,b74 7#d7 ,c>ry=w>d 7,a7 ,disall[$ int]e/ ,any am\nt disall[$ "u subp>agraph 7,a7 or 7,c7 = any taxable ye> %all be treat$ z an int]e/ exp5se 9 ! next taxable ye>1 & su* am\nt %all n be tak5 into acc\nt = purposes ( apply+ subsection 7j77#b77;,a77ii7 = su* taxable ye>4 7,b7 ,excess limitation ,! excess 7if any7 ( ! sum det]m9$ "u p>agraph 7#a77;,a7 7i7 & 7ii7 = a taxable ye> ov] ! am\nt ( int]e/ exp5se d$uct$ "u ?is subsection = ! taxable ye> %all be add$ to ! limitation det]m9$ "u p>agraph 7#a7 = ! next taxable ye> 7det]m9$ )\t reg>d to ?is subp>agraph74 ,no excess limitation may be c>ri$ to m ?an #c taxable ye>s4 7#e7 ,election ,! election "u p>agraph 7#a77;,c77ii7 %all be made at su* "t & 9 su* mann] z ! ,secret>y may prescribe by regulations4 7#f7 ,regulations ,! ,secret>y %all prescribe su* regulations & o!r guidance z may be necess>y to c>ry out ! purposes ( ?is subsection1 includ+ regulations to-- 7,a7 coord9ate ! application ( ?is subsection ) o!r int]e/ d$uctibility rules1 7,b7 def9e f9ancial s]vices entities1 7,c7 p]mit f9ancial report+ gr\ps to compute ! gr\p's non-,unit$ ,/ates net int]e/ exp5se )\t mak+ c]ta9 adju/m5ts requir$ "u ,unit$ ,/ates income tax pr9ciples1 7,d7 provide = ! treatm5t ( pass-?r\gh entities1 & 7,e7 all[ ! use ( f9ancial /atem5ts prep>$ "u o!r c\ntries' g5]ally accept$ acc\nt+ pr9ciples 9 appropriate circum/ances :]e a f9ancial report+ gr\p does n prep>e f9ancial /atem5ts "u ,unit$ ,/ates g5]ally accept$ acc\nt+ pr9ciples or int]national f9ancial report+ /&>ds4 4 7b7 ,coord9ation ) #afc7;j7 ,section #afc7;j77#b77;,a7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ flu% s5t5ce3 ,?is subsection %all n apply to any corporation :i* is a memb] ( a f9ancial report+ gr\p to :i* subsection 7n7 applies44 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjad4