If a person receives Form 1099-Misc for a loan and a grant.
How is this information processed?
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?
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
"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.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.