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Adjusting OAA for 2020 PPP loan
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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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dkh
Level 15
02-18-2022
08:47 AM
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I bookmarked a couple of posts regarding PPP loan in SCorps see if these have anything to help you
1120s ppp loan forgiveness entries - Intuit Accountants Community
How to enter the PPP forgiveness on 1120S Sch M-2 - Intuit Accountants Community
mary ann
Level 2
02-18-2022
12:53 PM
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Thank you for those posts. I had figured out how to force the updates in the M-2. I did overrides on the M-2 worksheet. That way it didn't impact the M-1. I am good with the current year PPP adjustments.
My question is should the OAA balance from my 2020 return for PPP loan forgiven in 2020 also be moved to the AAA column now after the fact? Otherwise, it will sit there forever.
