Hi,
I hope some tax professionals can help!
After hours of investigation on how to report forgiven PPP loan and EIDL advance on 1120S, I am about to finalize 1120 S.
In my case, I am single owner/employee S.Corp. I have $10,000 for forgiven PPP loan and EIDL.
First off, on my balance sheet, my retained earnings got increased by $10,000 and this retained earnings is the same as shareholder stock basis.
Move on 1120S.
Schedule B line 12: Yes, $10,000
Schedule K line 16b other tax exempt income: $10,000
Schedule M1 line 5 a: enter "Forgiven PPP loan/EIDL advance" $10,000
Schedule M2 Line 3 (d) OAA : $10,000
Line 8 (a) and (d) is the same as retained earnings.
Schedule K1 : box 16 code B $10,000
Please advise me if I did wrong. Thank you very much!
Would you mind sharing more info on that?
1. Did you include PPP loan amount in your 1120s Gross Receipts and Sales? Or you reported it somewhere else as an income?
2. Schedule K, line 16 B - in TT form it says if you use M-1 calcs don't enter the info here
How did you put it on K-1 line 16 as B?
Thanks
All looks good except:
Question 12 SCH B 1120S; Amounts related to the forgiveness of PPP Loans are disregarded for purpose of this question.
www.irs.gov Instruction 1120S Draft as of December 22, 2021 Page 22
2021 Instructions for form 1120-S draft as of December 22, 2021.
Page 22 1120-S Schedule B Question 12 states:
“Amounts related to the forgiveness of PPP loans are disregarded for purposes of this question.”
As of today’s date, the IRS does not post a 2021 Instructions for form 1120-S but the treatment in the draft version is my understanding of the direction that the IRS is likely to go.