Adjusted Taxable Income (ATI) is a measure of income used primarily in tax and financial calculations, particularly for determining business interest expense limitations under U.S. tax law.
It is generally calculated as taxable income before considering non-cash deductions such as depreciation, amortization, and depletion, as well as interest expense and certain tax attributes.
By excluding these items, ATI provides a clearer picture of a business’s operating earnings for tax purposes.
This figure is key in applying the IRS Section 163(j) limitation, which caps the amount of deductible business interest expense.
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