mary ann
Level 2
02-17-2022
04:32 PM
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The 2021 1120S instructions state to report expenses paid from 2021 forgiven PPP loan proceeds on the M-2 line 3(a) and 5(d). That results in 0 net change in the OAA column for 2021 PPP loan. So the increase in basis shows in AAA, not OAA.
Should we also make a similar adjustment now on the 2021 M-2 for expenses paid from 2020 forgiven PPP loan? These expenses were included only in line 2(a) for AAA on the 2020 return. The 2020 tax-exempt income was properly reported in the OAA column. So the 2020 increase in basis showed in OAA and will stay there in 2021 and beyond. Does the IRS now want this in AAA?
Should we also make a similar adjustment now on the 2021 M-2 for expenses paid from 2020 forgiven PPP loan? These expenses were included only in line 2(a) for AAA on the 2020 return. The 2020 tax-exempt income was properly reported in the OAA column. So the 2020 increase in basis showed in OAA and will stay there in 2021 and beyond. Does the IRS now want this in AAA?
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