Recording of PPP loan forgiveness 1120S

[ALMULTISVS]

how to record the forgiveness of PPP loan on 1120S tax return . i recorded it as a tax exempt income on schedule K line 16b. does it need to be recorded else on the tax return?

[Beersheba]

It needs to increase the retained earnings account on Schedule L, even though it is tax exempt, because it is still "book" income.

Don't forget it needs to be added to the shareholder's basis as well.

[Uncle Sam]

Yes - it increases the overall retained earnings account, but it is considered "Other Adjustments Account" - the 3rd column of Schedule M-2

[spanel]

https://www.accountingweb.com/tax/bu...-on-form-1120s