### Question
How is the "excess limitation" defined?


### Answer
The term **excess limitation** is defined in *26 U.S.C. § 163* as follows -

> the excess (if any) of—


(I) 50 percent of the adjusted taxable income of the corporation, over


(II) the corporation's net interest expense

#### Citation:
  - *26 U.S.C. § 163*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VI-ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS**

