How does IRC 163(j) business interest limitation affect my foreign-owned LLC that has a loan from its parent company?
I'm a UK citizen and my UK company lent $500,000 to my U.S. LLC at 6% interest. My CPA says IRC 163(j) might limit how much of that interest my LLC can deduct. She mentioned something about '30% of adjusted taxable income.' I always thought interest was fully deductible. Can you explain what this limitation is and whether it applies to intercompany loans specifically?
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