year, or (II) 10 percent of the taxpayer’s adjusted taxable income for the taxable year, plus (ii) the excess limitation carryforwards to the taxable year from any preceding taxable year. (B) Limitation not less than includible interest The applicable limitation under subparagraph (A) for any taxable year shall not be less than the amount of interest includible in the gross income of the taxpayer for the taxable year. (C) Excess limitation carryforward If the applicable limitation of a taxpayer for any taxable year (determined without regard to carryforwards under subparagraph (A)(ii)) exceeds the interest paid or accrued by the taxpayer during the taxable year, such excess shall be an excess limitation carryforward to the 1st succeeding taxable year and the 2nd and 3rd succeeding taxable years to the extent not previously taken into account under this paragraph. (4) Allocable share of net interest expense For purposes of this subsection— (A) In general A taxpayer’s allocable share of an applicable financial reporting group’s net interest expense for any taxable year shall be the amount (not less than zero) which bears the same ratio to such net interest expense as— (i) the net earnings of the taxpayer, bears to (ii) the aggregate net earnings of all members of the applicable financial reporting group. (B) Net earnings The term net earnings means, with respect to any taxpayer, the earnings of the taxpayer— (i) computed without regard to any reduction allowable for— (I) net interest expense, (II) taxes, or (III) depreciation, amortization, or depletion, and (ii) computed with such other adjustments as the Secretary may by regulations prescribe. (C) Burden on taxpayer If a taxpayer elects not to compute its allocable share, or fails to establish to the satisfaction of the Secretary the amount of its allocable share, for any taxable year, the allocable share shall be zero. (5) Net interest expense and net earnings determinations For purposes of this subsection— (A) Net interest expense Any determination of net