Question

Business interest deduction

Forum|Forum|7 years ago
December 13, 2018
2 replies
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My business partnership purchased a piece of equipment in 2018. With the new tax laws changing, I understand that I can write off the whole price. However I am on an installment plan for 5 years, can I write the whole interest on the item or just what interest I pay each year?

MargaretL

You cannot deduct the whole interest amount.

If your partnership is on the cash basis, you can deduct only the interest you actually paid. If your business is under the accrual method, you can deduct only the interest amount that has accrued during the tax year.