Since its introduction via the 2017 tax reforms, there have been a number of revisions to limitations on business interest deductions under Section 163(j) of the Internal Revenue Code. Those are particularly relevant in the context of “trading partnerships” (e.g., hedge funds, private equity funds, etc.), as the rules are murkier now as to how and when deductions are applied to business interests and investment interests. Those issues and others were addressed in a recent Troutman Pepper webinar on Section 163(j) featuring attorneys Steven D. Bortnick and Morgan Klinzing. This second article in a two-part series examines how Section 163 applies to trading partnerships, as well as the application of recent legislative proposals on controlled foreign corporations. The first article covered the tax provision’s posture on U.S. earnings stripping, business interest deduction limitations and the treatment of different types of partnership structures. For coverage of other relevant tax issues, see “Key Tax Issues Fund Managers Must Consider” (Jun. 10, 2021); and “Hot Tax Topics for Private Fund Investors and Managers” (Jan. 21, 2021).