similar to the rules of subparagraphs (A) and (B) shall apply with respect to any S corporation and its shareholders. (4) Business interest For purposes of this subsection, the term business interest means any interest paid or accrued on indebtedness properly allocable to a trade or business. Such term shall not include investment interest (within the meaning of subsection (d)). (5) Business interest income For purposes of this subsection, the term business interest income means the amount of interest includible in the gross income of the taxpayer for the taxable year which is properly allocable to a trade or business. Such term shall not include investment income (within the meaning of subsection (d)). (6) Adjusted taxable income For purposes of this subsection, the term adjusted taxable income means the taxable income of the taxpayer— (A) computed without regard to— (i) any item of income, gain, deduction, or loss which is not properly allocable to a trade or business, (ii) any business interest or business interest income, (iii) the amount of any net operating loss deduction under section 172, and (iv) any deduction allowable for depreciation, amortization, or depletion, and (B) computed with such other adjustments as the Secretary may provide. (7) Trade or business For purposes of this subsection, the term trade or business shall not include— (A) the trade or business of performing services as an employee, (B) a real property trade or business (as such term is defined in section 469(c)(7)(C)), or (C) the trade or business of the furnishing or sale of— (i) electrical energy, water, or sewage disposal services, (ii) gas or steam through a local distribution system, or (iii) transportation of gas or steam by pipeline, if the rates for such furnishing or sale, as the case may be, have been established or approved by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political