This question is asking how you recorded the tax-exempt income from the PPP Loan forgiveness.
1. Did you book the income as you paid the expenses?
2. When you applied for forgiveness?
3. When you received notice that the loan was forgiven?
Most businesses wait to see how much of the loan is forgiven before recording the tax-exempt income, so #3 would be the best choice. If all three of the choices occurred in the same tax year, it doesn't really matter which you choose.
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