PPP Forgiveness for fiscal year - Spidell

PPP Forgiveness for fiscal year

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Message Board PPP Forgiveness for fiscal year

  • This topic has 2 replies, 2 voices, and was last updated 1 week, 6 days ago by David Richardson.
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    • #273660
      David Richardson
      Participant

      can a C corp with a june fiscal year who got PPP money in May 2020 deduct payroll and rent  in June 2020 yearend and book the PPP as a loan, and then move the liability to income in next fiscal year after it is forgiven?

      or can a calendar yearend S corp take the PPP deductions in 2020 and apply for forgiveness in late December so that it is forgiven in 2021.  and in 2021 reclassify the debt to income?

    • #273677
      Lynn Freer
      Participant

      We think businesses will have a hard time trying to claim deductions in the current year and then wait until the following year to pick up the PPP as income.
      <div>Remember, forgiven PPP funds are not income, but if any expenses are paid with forgiven PPP funds, the expenses are not deductible. I think any business whose tax year ends before they know how much of their PPP loan will be forgiven must file an extension and wait until they know. This is similar to a taxpayer who has a like-kind exchange that straddles two tax years. You need to file an extension until the entire transaction is complete.</div>

    • #273678
      David Richardson
      Participant

      thanks for the logical reply.  what about a C Corp June 2020 yearend. They got PPP money in May.  Can we take salaries during the later part of the 24 week period (AFTER June 30, 2020) as the forgiven salaries and rent and thus be able to deduct full salaries and rent thru June 30, 2020? SBA forgiveness will come towards end of 2019 or maybe 2021.

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