MFA Submits Comment Letter To Treasury Department on Business Interest Expense
February 27, 2019
On February 26, MFA submitted comments to the Treasury Department and the IRS on their proposed rules to implement the provisions of section 163(j) of the Internal Revenue Code, which generally limits the ability to deduct business interest expenses. In our letter, we encouraged Treasury and the IRS to: (1) clarify that investment interest expense of trading partnerships is properly excluded from the limitations on the deductibility of business interest expense; (2) provide a more tailored definition of “interest” in the Proposed Regulations; (3) provide for symmetrical treatment of interest expense and interest income in the proposed anti-avoidance rule; and (4) provide a framework that would allow tiered partnerships to aggregate interest expense and interest income on a consolidated basis, similar to the approach permitted for consolidated corporate groups. MFA will continue to engage with Treasury and the IRS on this issue.