Section 70301 of the One Big Beautiful Bill Act made permanent one of the most consequential business tax changes of OBBBA: the restoration of the EBITDA-based adjusted taxable income (ATI) calculation under IRC §163(j) ² for tax years beginning after December 31, 2024. For four years (2022–2024), real estate, manufacturing, and other capital-intensive businesses operated under the more punitive EBIT-based ATI rules that limited interest deductibility. Now, with the depreciation and amortization addback restored, permanently, the planning conversation shifts to whether real-estate clients should unwind their §163(j)(7)(B) "real property trade or business" elections.
For our commercial-real-estate sponsors, fund managers, and high-leverage operators, this is the most significant interest-deduction provision in OBBBA.
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