If it's an M-1 nondeductible expense adjustment, then nondeductible expenses historically reduce the tax basis in the entity. So if we reduce page 1 1120S wages, then also record as an M-1 adjustment, we've increased basis and reduced basis as a wash. Issue is business has more real cash from the credit, so if that is distributed we get an unintended basis reduction (ignoring all other basis adjustments) . Similar, but not equal to, PPP basis treatment if the "no item of basis shall be effected" language was not added in March.