SUPPLEMENT TO ACCOMPANY - Pratt & Kulsrud
As a result, it normally would have no deduction for its business interest in 2020 since ATI was negative (50% x ATI $0 = $0). However, under the CARES Act, the business could elect to use its 2019 ATI for 2020. In such case, it could deduct $2.5 million of interest expense in 2020 (50% x $5 million ATI from 2019 instead of 2020). ................
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