Armitage Inc. has earned gross receipts of about $10 million for the past 3 years. This year it earns gross receipts of $10,600,000. Armitage has $5,000 of business interest income, $400,000 of adjusted taxable income and $200,000 of business interest expense.

How much business interest expense can Armitage deduct?

Assume the same facts except that Armitage’s gross receipts for the past 3 years have averaged about $30 million. How much business interest can Armitage deduct?

Answer rating: 100% (QA)

Generally taxpayers can deduct interest expenses paid or accrued in the taxable year However if sect... View the full answer