Here's a hypothetical scenario hopefully someone can answer.
You have 10,000 in normal income for you business and 5000 in EIDL grant received. You have a total of 15000 in expenses which includes expenses paid using the grant money. Since the IRS is not taxing the EIDL grant, it will not be reported as taxable income. However, since the expenses paid using the EIDL grant are deductible, 1120S will essentially show a loss correct? Because they are only seeing 10,000 in taxable income minus the 15,000 in total expenses deducted. The 5,000 EIDL grant has no say in this part.
Would that be correct? This should technically show a loss on 1120S? Which will be passed down to the shareholders.
