The rising interest rates will directly affect real estate businesses operating across all asset classes. The ability to deduct interest expense for tax purposes has helped to alleviate some of the tax burden for business owners. However, the Tax Cuts and Jobs Act of 2017 (“TCJA”) imposed limitations on the deductibility of interest expense for certain taxpayers. For tax years beginning on or after January 1, 2022, some of the adjustments that increased the allowable deduction of interest expense for certain taxpayers have sunset. Accordingly, the sun-setting of these provisions may result in significant increases in taxable income for leveraged businesses subject to these rules. Understanding how the changes to the rules may impact your business now will enable you to properly manage your business’s cash flow and avoid any tax surprises next April.