Other adjustments
(v) Other adjustments. ATI is computed with the other adjustments provided in 1.163(j)-2 through 1.163(j)-11. (vi) Additional rules relating to adjusted taxable income in other sections. (A) For rules governing the ATI of C corporations, see 1.163(j)-4(b)(2) and (3) and 1.163(j)-10(a)(2)(ii). (B) For rules governing the ATI of RICs and REITs, see 1.163(j)-4(b)(4). (C) For rules governing the ATI of tax-exempt corporations, see 1.163(j)-4(b)(5). (D) For rules governing the ATI of consolidated groups, see 1.163(j)-4(d)(2)(iv) and (v). (E) For rules governing the ATI of partnerships, see 1.163(j)-6(d). (F) For rules governing the ATI of partners, see 1.163(j)-6(e) and 1.163(j)-6(m)(1) and (2). (G) For rules governing partnership basis adjustments affecting ATI, see 1.163(j)-6(h)(2). (H) For rules governing the ATI of S corporations, see 1.163(j)-6(l)(3). (I) For rules governing the ATI of S corporation shareholders, see 1.163(j)-6(l)(4). (J) For rules governing the ATI of certain beneficiaries of trusts and estates, see 1.163(j)-2(f). (vii) ATI cannot be less than zero. If the ATI of a taxpayer would be less than zero, the ATI of the taxpayer is zero. (viii) Examples. The examples in this paragraph (b)(1)(viii) illustrate the application of paragraphs (b)(1)(ii), (iii), and (iv) of this section. Unless otherwise indicated, A, B, P, S, and T are calendar-year domestic C corporations; P is the parent of a consolidated group of which S and T are members; the exemption for certain small businesses in 1.163(j)-2(d) does not apply; no entity is engaged in an excepted trade or business; no entity has business interest income or floor plan financing interest expense; and all amounts of interest expense are deductible except for the potential application of section 163(j). (A) Example 1(1) Facts. In 2021, A purchases a depreciable asset (Asset X) for $30x and fully depreciates Asset X under section 168(k). For the 2021 taxable year, A establishes that its ATI before adding back depreciation deductions with respect to Asset X under paragraph (b)(1)(i)(D) of this section is $130x, and that its ATI after adding back depreciation deductions with respect to Asset X under paragraph (b)(1)(i)(D) of this section is $160x. A incurs $45x of business interest expense in 2021. In 2024, A sells Asset X to an unrelated third party for $25x.