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  • videocam Live Webinar with Live Q&A
  • calendar_month February 17, 2026 @ 1:00 p.m. ET./10:00 a.m. PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

OBBBA Modifications to IRC 163(j) Business Interest Deduction Limitation Rules

Calculations, Exceptions, Electing Out

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About the Course

Introduction

This course will guide partnership tax advisers and compliance professionals in navigating the One Big Beautiful Bill Act (OBBBA) modifications to Section 163(j) Business Interest Deduction Limitation rules as they apply to individuals, partnerships, and other pass-through entities. The panel will discuss interest expenses subject to limitation and the various exceptions.

Description

Prior to the OBBBA, the Tax Cuts and Jobs Act limited deductible business interest to earnings before interest, taxes, depreciation, and amortization (EBITDA). Under the OBBBA, the deduction limitation has reverted to earnings before interest and taxes (EBIT). Effective for years beginning after Dec. 31, 2024, this change significantly reduces the number of taxpayers subject to the limitation.

As before, taxpayers may consider using the various exceptions to the limitations. The limitations do not apply to investment interest, real property trades or businesses, or certain small businesses. The OBBBA raised the threshold for being considered a small business to $31 million.

Certain real estate businesses can elect out of the limitations at a cost of less depreciation for some real property. The availability and effects of such elections are subject to some debate, including the interaction between partnership-level and partner-level elections. Tax professionals advising businesses need to understand the nuances of IRC Section 163(j) interest limitations and the impact of the OBBBA on this valuable deduction.

Listen as our experienced panel provides a thorough, practical guide to Section 163(j) business interest deduction limitations and how to avoid them.

 

Presented By

Brian Boland
Attorney
Darrow Everett LLP

Mr. Boland is a member of DarrowEverett’s Mergers & Acquisitions and Tax Practice Groups. His practice focuses on tax, general business law, mergers & acquisitions, and financing. Throughout his career, Mr. Boland has represented clients in a variety of corporate transactions and financings, including acquisitions, mergers, tax credit financing, commercial real estate investments, and acquisition financing. He regularly counsels clients on tax matters regarding mergers & acquisitions, management bonus plans, and other general corporate and tax issues.

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Joseph C. Mandarino
Partner
Smith Gambrell Russell

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of businesses and transactions, including experience with compliance, planning and M&A activities for partnerships, individuals and corporations. Mr. Mandarino’s practice also includes representation in tax controversy work. He writes and speaks extensively on a wide range of business, tax and finance topics.

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Date + Time

  • event

    Tuesday, February 17, 2026

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. Overview of Section 163(j) treatment of business interest

II. The OBBBA modifications to the Section 163(j) limitation

III. Definitions of ATI and business interest

IV. Exemption for investment interest

A. Trading partnerships

B. Real estate investments

V. Exemption for small businesses

A. Aggregation rules

B. Tax shelters

VI. Election for real property trade or business

VII. Eleven-step process for partnership allocation of Section 163(j) items

VIII. Best practices

The panel will discuss these and other relevant topics:

  • Recent modifications to Section 163(j) by the OBBBA
  • Electing out for certain real estate businesses
  • Impact of the real property trade or business election on depreciation for old and new properties
  • Carryover rules, including for small businesses and electing real property trades or businesses

Learning Objectives

After completing this course, you will be able to:

  • Recognize the impact that the new OBBBA provisions have on partnership and pass-through entities
  • Identify the exceptions that allow a business to avoid the consequences of IRC 163(j)
  • Ascertain whether a business is eligible for exemption from IRC Section 163(j) under complex small business rules
  • Decide whether a real estate business may elect to opt out of the IRC Section 163(j) limitations and whether it is advantageous to do so
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of partnership structure, operating agreements and liquidation, including partner capital accounts, debt allocation and distributions; familiarity with the debt allocation provisions of Section 752; familiarity with the disguised sales provisions of IRC Section 707 and the rules governing transactions between a partnership and its partner(s).

BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .