Floor plan financing interest expense is not subject to the section 163 j limitation.
What is floor plan financing interest.
Floor plan financing interest expense remained fully deductible under tax reform.
Much like a credit card a floor plan financing company extends a line of credit to a car dealer.
Floor planning is a form of retailer financing for large ticket items displayed on showroom floors or lots.
Floor plan financing interest expense.
But it came at a cost.
So how does floor plan financing work.
Dealerships that take the floor plan financing interest exclusion in computing their limit can t claim 100 bonus depreciation for their fixed asset additions.
Simply it is a way for an auto dealer to use a lender s funds to finance the cars and until each of them is sold the lender holds title to the cars.
What you don t realize is that like most new car dealers a floor plan was used to finance the cars.
Floor plan lending is a form of inventory financing for a dealer of consumer or commercial goods in which each loan advance is made against a specific piece of collateral.