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If a person receives Form 1099-Misc for a loan and a grant.
How is this information processed?
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That's too vague to answer.
Person or Business Entity?
Grant from Whom? What was it applied for?
Loan from Whom? What was it used for?
1099-Misc from Whom, to Whom? Which Box?
State, Fed, both?
Which tax form are you preparing?
Is this all 2020?
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Thanks for your answer.
He is a owner of restaurant and received a grant for $2500 from the city.
Also, he received a loan for $10,000 from SBA
All these aid are due to the pandemic and correspond to the 2020 taxes
Both forms 1099-Misc show Box 3, Other income
Because he is the only owner of the business, I use form 1040 and Schedule C to report his business
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"Because he is the only owner of the business, I use form 1040 and Schedule C to report his business"
Because he is Not running the business under a Corporate entity (C or S)? That's a different reason than what you stated.
The forgivable loans are not supposed to be reported on 1099-Misc. Even when they are forgiven, they are not supposed to be reported on a 1099-Misc. For instance, the SBA made 6 loan payments, the principal is not reportable, the interest still is deductible, and the Banks were told this.
Loans are not reported on taxes; they are debt to be repaid and not income.
A City grant to a business is supposed to be reported on 1099-G, and it is taxable for Fed, except for specific grants such as Shuttered venues and emergency response.
https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions
https://www.lmc.org/resources/cares-act-funds-form-1099g/
"All these aid are due to the pandemic and correspond to the 2020 taxes "
But for What? Rent, Expenses, Wages? An Air Quality Improvement grant?
Everything matters.
I doubt anyone on the internet can help. You will need to get the taxpayer to contact the grantor, perhaps.
Don't yell at us; we're volunteers