Question

george operates a business that generated revenues of $69 million and allocable taxable income of $1.44 million. included in the computation of allocable taxable income were deductible expenses of $249,500 of business interest and $259,500 of depreciation. what is the maximum business interest deduction that george will be eligible to claim this year?.

Answer 1

If george operates a business that generated revenues of $69 million.  the maximum business interest deduction that george will be eligible to claim this year is:$584,700.

How to find the maximum business interest deduction?

Using this formula to find the maximum business interest deduction

Maximum business interest deduction = Allocable taxable income + Deductible expenses business interest + Depreciation) × Tax rate

Let plug in the formula

Maximum business interest deduction = ($1,440,000 + $249,500 + $259,500) × 30%

Maximum business interest deduction =$1,949,000 × 30%

Maximum business interest deduction = $584,700

Therefore the maximum business interest deduction is $584,700.

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