On November 26, 2018, the Department of Treasury and US Internal Revenue Service released proposed regulations that flesh out the new Section 163(j) interest limitation rule—a cornerstone of the Tax Cuts and Jobs Act enacted by Congress in December 2017. The rule, which applies to all taxpayers (subject to specified exceptions) and reduces their ability to deduct interest expenses, also changes the landscape for how businesses will consider funding their operations. This Legal Update sets forth an overview of certain portions of the proposed regulations.

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