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Excepted trade or business under Section 163(j) (FAQ)

Use the following guidance to complete the
Section 1.163(j)-9 election was made for an excepted trade or business
field.
  • This field asks whether the activity meets the excepted trade or business criteria in the calculation of Form 8990, Limitation on Business Interest Expense Under Section 163(j). It's found on each of the activity screens: Inc, F, 4835, and Rent.
  • Leave the field blank if the income isn't from an excepted trade or business per page 2 of the Form 8990 instructions. The income will be included on Form 8990 and the form will print with the return.
  • Enter
    X
     if the activity is an excepted trade or business and is therefore exempt from being included on Form 8990. The form won't print if you enter
    X
     here for every activity in the return. However, you may need to enter additional data about the election if the excepted trade or business includes the following:
    • A utility business.
       The Section 163(j) limitation doesn't apply to a utility's trade or business specified in Section 163(j)(7)(A)(iv). No other election is required for this type of trade or business.
    • A real property trade or business that has elected out of the Section 163(j) limitation under Section 163(j)(7)(B).
       To make this election, enter data in the
      Section 1.163(j)-9 election
       statement window in the Elect screen in the Elections folder.
    • A farming trade or business that has elected out of the Section 163(j) limitation under Section 163(j)(7)(C).
       Enter data in the
      Section 1.163(j)-9 election
       statement window in the Elect screen in the Elections folder.
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