IRS publications and form instructions are not official documents that taxpayers can rely on if they follow them and they are wrong. A couple did rely on a publication that had an error. The IRS caught them. Hit them with taxes penalties and interest. They went to court citing reliance on the publication. The court said too bad that pub is not official.
pub 334 also says this
Interest and Dividend Income
Interest and dividends may be considered business income. Interest received on notes receivable that you
have accepted in the ordinary course of business is business income. Interest received on loans is business
income if you are in the business of lending money.
thus if an entity not in the business of lending money were to make a loan and collect interest, that interest would not be business interest.
so is interest on a business checking account business interest or not? in my opinion, if the entity is not in the business of earning interest income (like a financial institution does) it's non-business.
