Effect of PPP on shareholder tax basis

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  • RWG1950
    Senior Member
    • Nov 2017
    • 461

    #1

    Effect of PPP on shareholder tax basis

    I've acquired new customers (MFJ) that have invested in several small limited partnerships.
    Some of these partnerships received PPP money.
    They've provided the 2023 K-1's and also amended 2021 & 2022 K-1's.
    Tax basis worksheet provided with the K-1's appear to show the PPP amount as increasing tax basis.
    As I understand this, the PPP amount is not taxable, but does it also increase partner tax basis?
    Thanks for comments.
  • New York Enrolled Agent
    Senior Member
    • Nov 2006
    • 1531

    #2
    Covid-related Tax Relief Act of 2020 provided that PPP money excluded from income should be treated as tax exempt income for purposes of section 705.

    Comment

    • BOB W
      Senior Member
      • Jun 2005
      • 4061

      #3
      I treat it as an increase in basis.
      This post is for discussion purposes only and should be verified with other sources before actual use.

      Many times I post additional info on the post, Click on "message board" for updated content.

      Comment

      • terryats
        Senior Member
        • Jan 2019
        • 258

        #4
        Tax exempt income increases stock basis for an S-Corp. See link: https://www.irs.gov/businesses/small...and-debt-basis

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