Just want to confirm I'm up to date with what the final regulation is for regular SBA loan payment forgiveness. S-corp client has existing SBA loan which had 6 months of payment made to bank by SBA. Originally I thought this would be taxable cancelled debt income but I think I remember seeing that is now treated as non taxable income. Am I correct and where would be the correct place to input on the 1120-S return? Thanks.
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For the form 1120s - PPP Loan Forgiven, entered as NON-Taxable income -- Enter on "Schedule M-1 Items Worksheet", under "Permanent Items (Tax-Exempt Income). I used the free-form entry line with description "Non-Taxable Income - PPP Loan Forgiveness".