We are looking into the matter. In the meantime have you tried completely the M-2 as suggested below.
You want to list separately but the correct reporting of the PPP loan forgiveness on M-2 of the 1120-S should be:
- Report on Line 3, Col (d) the amount of the PPP loan forgiveness
- Report on Line 5, Col (d) the amount of expenses paid with the PPP proceeds forgiven,
The amount of expenses and the amount of the PPP loan forgiven should offset each other and there should not be a tax consequence or should not affect your stock basis.
Here is an article that discusses the correct handling of the PPP Loan Forgiveness.
You can also get guidance for the correct handling in the Form 1120-S Instructions.
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