AICPA issues TQAs related to Sec. 163(j), GASB 84

By Ken Tysiac

The AICPA issued separate Technical Questions and Answers on Thursday to provide nonauthoritative guidance in response to the amendment of Internal Revenue Code Sec. 163(j) and related to GASB’s fiduciary activities guidance.

Technical Questions and Answers (TQAs) 3300.01–.02 provide guidance relevant to Sec. 163(j), which was amended in 2017 to limit the deduction for business interest to the sum of (1) business interest income; (2) 30% of the taxpayer’s adjusted taxable income for the tax year; and (3) the taxpayer’s floor plan financing interest for the tax year. Any disallowed business interest deduction can be carried forward indefinitely (with certain restrictions for partnerships). The limitation was generally effective for tax years beginning after Dec. 31, 2017, and applies to all taxpayers, except certain trades or businesses listed in Sec. 163(j)(7) and taxpayers with average annual gross receipts that do not exceed $25 million.

The TQAs discuss how an entity should assess realizability of its existing deferred tax assets related to disallowed interest deductions when there are:

  • Reversing deferred tax liabilities, and
  • An expectation of future interest expense that will also be limited under Sec. 163(j).

TQAs 6950.23–.24 provide background information on how GASB Statement No. 84, Fiduciary Activities, changes the framework used to evaluate whether activities are fiduciary in nature. The TQAs also describe the standard’s clarification that the reporting of fiduciary activities applies also to special-purpose governments engaged in business-type activities.

Under the standard, some of these governments will be reporting fiduciary activities for the first time. The TQAs describe how an auditor would assess the appropriateness of such a government’s omission of its only fiduciary fund in the financial statements when the government considers the omission to be immaterial.

Ken Tysiac ( is the JofA’s editorial director.


Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.


Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.