Interest disallowance limited by netting and representative-capacity rules for firm partner interest transactions. Amendments to section 40 add explanations limiting interest disallowance between a firm and its partners: disallowance is confined to the excess where reciprocal interest is paid; interest involving partners acting otherwise than in a representative capacity is excluded, while interest paid in a representative capacity and interest involving the person represented are included; and interest paid to a non representative partner is excluded from disallowance if received on behalf of another person.