For purposes of the business interest limitation, adjusted taxable income is defined as taxable income allocable to the business computed without regard to interest income, depreciation, amortization, or depletion; interest expense; and net operating loss deductions.
<h3>What do you mean by the taxable income?</h3>
The portion of an individual's or business's income that is subject to taxation after deductions and exemptions is known as taxable income. Salary or earnings, tips, benefits, and investment income are examples of taxable income.
Adjusted taxable income is taxable income allocable to the business that has been calculated without taking into account any of the following: interest income, depreciation, amortization, or depletion; interest expense; or net operating loss deductions.
Compensation, businesses, partnerships, and royalties are a few examples of sources of taxable income. Due to deductions, taxable income is typically lower than adjusted gross income.
Therefore, for purposes of the business interest limitation, adjusted taxable income is defined as taxable income allocable to the business computed without regard to interest income, depreciation, amortization, or depletion; interest expense; and net operating loss deductions.
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