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New Member
posted Dec 12, 2018 10:34:17 PM

Business interest deduction

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?

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3 Replies
Expert Alumni
Dec 13, 2018 1:08:04 PM

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. 

New Member
Dec 13, 2018 3:54:45 PM

Okay. That is what I thought. I just wanted to make sure. Thank You!

Expert Alumni
Dec 14, 2018 8:07:57 AM

My pleasure, Good luck in 2019!