SBAD TREAS 310 MISC PAY

[mhammer]

My LLC received a SBAD TREAS 310 MISCEL PAY, aka a loan, from the USG as part of the covid relief in 2020. Where do I enter it on Form 1065 in Turbotax Business SW so my balance sheet reflects it?

[MinhT1]

This SBA loan is reported on Form 1065 on the Balance sheet (Schedule L) in the Liabilities and Capital section on line 18 - All nonrecourse loans.

[mhammer]

Thanks MinhT1. That takes care of the liabilities portion of the balance sheet.

Where do I enter it in the Assets portion of the balance sheet?

Mark

[mhammer]

Line 13 perhaps?

[MinhT1]

You do not enter the loan in the asset section. It is already included in your bank balance.reported as Cash on line 1.

[mhammer]

Line 1 is simply cash on hand at end of year. The amount of the loan is not included in line 1. The loan was used to pay a third party contractor and is not on hand at year end.

Also, the loan is excluded from taxable income per CPA guidance. So, It has to included in an untaxed, separate line item. Given the CPA's guidance, the question is where to include it as a separate asset in Intuit's 2020 Business Tax Form 1065, Schedule L Assets in order for the balance sheet "to balance"?

[MinhT1 · Accepted solution]

Your balance sheet should balance without including that loan in the asset section.

The loan is not taxable and is not reported as income on form 1065.

In fact, the account entry when you received the loan is   Debit Cash at bank  and Credit Loans.

At year end, the loan remains unpaid and is reported as a liability. The cash at banks has been spent for business expenses and the balance at year end is reported on line 1.