topic SBA loan in Business & farm

SBA loan

cactuscyn2 — Thu, 17 Dec 2020 19:35:35 GMT

Should proceeds from a COVID-related SBA loan be reported as "additional income" for my small farm? If so, can that amount be excluded from my taxable self-employment?

Thanks for any help.

Re: SBA loan

Critter-3 — Thu, 17 Dec 2020 21:44:03 GMT

There are two schools of thought on this situation but the IRS has yet to put out final regulations on how they want these forgiven covid loans reported.

Re: SBA loan

Critter-3 — Thu, 17 Dec 2020 21:47:45 GMT

If the loan is forgiven, you will either report the income on your return and take a deduction for the expenses that they paid OR you will not report the income and you will not take a deduction for the expenses that they paid.

If the loan or any portion of the loan is not forgiven then The unforgiven portion is income and the expenses they paid are deductible as well as the interest you pay on the loan. And the forgiven portion is handled as already mentioned above.