CL LLC is a manufacturing business and reported adjusted taxable income in 2022 of $40,000,000...
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CL LLC is a manufacturing business and reported adjusted taxable income in 2022 of $40,000,000 before interest expense, taxes, depreciation, and amortization ("tax EBITDA"), plus $1,500,000 of separately stated investment income. CL incurred interest expense of $1,000,000 in connection with this investment income and $14,000,000 in connection with its trade or business.
How would your answers to parts (a) through (c) change if CL's adjusted taxable income was $4,000,000 (plus $150,000 of investment income), its average annual gross receipts for all prior tax years was $10,000,000 or less, and the interest expense amounts were $100,000 (investment) and $1,400,000 (business)?
If average annual gross receipts do not exceed $?????? for the prior tax year, the business interest expense limitation does not
apply, so all business interest expense is currently deductible by the LLC.
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