Ppp

[KWF]

In 2020, a sole proprietor Sch C taxpayer receives a $2700 PPP loan for owner compensation replacement.

The loan is ultimately forgiven, and not required to be paid back.

Does taxpayer need to include the $2700 on his 2020 tax return as Sch C income, subject to income & se tax?

[Anarchrist]

no
however, i need 10 characters to post

[ATSMAN]

SBA just released the updated PPP Forgiveness application including a EZ version.

[Dusty2004]

No, however as I understand it, the expenses that he paid with the PPP are not deductible as an expense.

[BOB W]

I have reviewed the new forgiveness application and upon review I do not see where transportation expense has a separate line entry. On a previous post several weeks ago someone replied that transportation meant fuel expense, with some authority. Does that mean that fuel will be included under utilities or what?

[Lion]

Love their definitions, but, yes, transportation seems to be fuel for company-owned vehicles and appears in the list of utilities.

[Uncle Sam]

Would the mileage allowance per mile be acceptable?

[BOB W]

I'm Just guessing, but I think fuel has to be the way the business operates. Like a trucking company or how product is delivered, not just general use of a business car. I can be wrong and have been wrong in the past.

[TAXNJ]

Does this help reply posters for a reference? Reason: no one is pointing to specific references for guidance.

https://www.sba.gov/sites/default/fi...7%2020-508.pdf

and

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

[sami]

Does this means the $2700 as owners draw is not reported on taxes? Client can say I took PPP for my compensation (i.e. draw) as sole prop and not to pay any bills, wonder how to account for that in taxes. Will Schedule C income will go up as other income, if no expenses to offset?

[Anarchrist]

I don't think it gets accounted for on the tax return. He basically received a $2700 non-taxable grant.

[Lion]

A sole proprietor's owner's draw is not a deduction on the tax return. The forgiven PPP is not income on a tax return. If 100% is forgiven, the tax return will not change. But, the SP's cash flow probably improved by receiving the PPP in the first half of the year.

[Dusty2004]

A sole proprietor's owner's draw is not a deduction on the tax return. The forgiven PPP is not income on a tax return. If 100% is forgiven, the tax return will not change. But, the SP's cash flow probably improved by receiving the PPP in the first half of the year.

Please, if I am wrong on this correct me. I believe that the owners draw money from the PPP will not be a forgivable loan.

[New York Enrolled Agent]

Please, if I am wrong on this correct me. I believe that the owners draw money from the PPP will not be a forgivable loan.

8/52 of the taxpayer's net Schedule C income will be forgiven. With the new recent guidelines there is some hope that that will be extended to 24/52.

[Lion]

Or, at least the 2.5/12 that the loan was based on might be eligible for forgiveness per the latest guidance on the PPPFA. It's changing almost daily, so stay tuned.