ABCTAX55

You are sadly mistaken. My answer is correct for ALL of them.  IF it is forgiven, it is tax free income. If it NOT forgiven, it is not income, but is a loan. You do NOT report loans as income, tax free or otherwise (with a couple of exceptions that are far outside the scope of this discussion and the understanding of most people who post on this board!) AFTER it is forgiven, it becomes tax free income. The only difference is how it is handled on a tax return, depending on the type of return being filed. AND no matter what kind of return is filed, the expenses are still allowable in full and allowable when paid or incurred, depending on the accounting method used on the tax return (also far outside the scope and understanding of this thread.)