The One Big Beautiful Bill Act (OBBBA) changes the capitalized interest rules under section 163(j)

The One Big Beautiful Bill Act makes three major changes to the interest deduction limitation provision of §163(j). Pub. L. No. 119-21, §70303, §70341 (July 4, 2025), applicable to taxable years beginning after December 31, 2024. This article reviews the three changes and then focuses on the new rule for capitalized interest.

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Reproduced with permission from Tax Management International Journal