diff --git a/torchdms/model.py b/torchdms/model.py
index 7890df15..3e169a85 100644
--- a/torchdms/model.py
+++ b/torchdms/model.py
@@ -362,17 +362,21 @@ def beta_coefficients(self):
     def regularization_loss(self):
         """L1 penalize single mutant effects, and pre-latent interaction
         weights."""
-        penalty = 0.0
-        if self.beta_l1_coefficient > 0.0:
-            penalty += self.beta_l1_coefficient * self.latent_layer.weight[
+        if self.beta_l1_coefficient > 0:
+            # NOTE: slice excludes interaction weights in latent layer
+            beta_l1_penalty = self.beta_l1_coefficient * self.latent_layer.weight[
                 :, : self.input_size
             ].norm(1)
+        else:
+            beta_l1_penalty = 0.0
         if self.interaction_l1_coefficient > 0.0:
-            for interaction_layer in self.layers[: self.latent_idx]:
-                penalty += self.interaction_l1_coefficient * getattr(
-                    self, interaction_layer
-                ).weight.norm(1)
-        return penalty
+            interaction_l1_penalty = self.interaction_l1_coefficient * sum(
+                getattr(self, interaction_layer).weight.norm(1)
+                for interaction_layer in self.layers[: self.latent_idx]
+            )
+        else:
+            interaction_l1_penalty = 0.0
+        return beta_l1_penalty + interaction_l1_penalty
 
 
 class Independent(TorchdmsModel):
diff --git a/torchdms/test/test_model.py b/torchdms/test/test_model.py
new file mode 100644
index 00000000..ac69c80a
--- /dev/null
+++ b/torchdms/test/test_model.py
@@ -0,0 +1,36 @@
+"""
+Testing model module
+"""
+import torch
+from torchdms.model import FullyConnected, identity
+
+
+def test_regularization_loss():
+    """Test regularization loss gradient."""
+
+    model = FullyConnected(
+        10,
+        [10, 2],
+        [None, identity],
+        [None],
+        None,
+        beta_l1_coefficient=torch.rand(1),
+        interaction_l1_coefficient=torch.rand(1),
+    )
+
+    loss = model.regularization_loss()
+    loss.backward()
+
+    for layer in model.layers:
+        layer_type = layer.split("_")[0]
+        if layer_type == "latent":
+            weight = model.latent_layer.weight[:, : model.input_size]
+            grad_weight = model.latent_layer.weight.grad[:, : model.input_size]
+            penalty = model.beta_l1_coefficient
+        elif layer_type == "interaction":
+            weight = getattr(model, layer).weight
+            grad_weight = getattr(model, layer).weight.grad
+            penalty = model.interaction_l1_coefficient
+        else:
+            continue
+        assert torch.equal(grad_weight, penalty * weight.sign())