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That sounds right, under the origin of claim doctrine those legal expenses would be capitalized.

All I know is it's covered on page 23 of 2021 Instructions for Form 1040, but I don't see it in the 2020 Instructions. Admittedly, the only place I looked in the 2020 Instructions was the same general place I found it in 2021. All mine who took these funds got them in 2020 and as far as I know they were forgiven in 2020. My clients didn't talk about it much after busting my chops to get their Sch Cs done. It was astonishing how habitual October filers were suddenly on the ball. Anyway, I feel like we're supposed to report the forgiveness that occurred in either 2020 or 2021 on the 2021 return. One more thing. Hugs.

The IRS doesn't need to prevent that. The IRS only follows the laws and if the laws have flaws, the IRS doesn't have the ability to "prevent" people from applying the law and taking the credits handed to them. Our elected officials are the ones that handed all the goodies and we have to take advantage. Too bad that to benefit, you MUST have one or more children. EIC, Child Tax Credit and child care credit are the winners in 2021.

You will still need 8867 for HOH

See this thread: No reporting of PPP loan forgiveness on 1040/Sch C - General Chat - ATX Community

and if they are representing at the shareholder level there would be a deemed distribution to the shareholders.

Thanks for the help. Apparently it is much the same here. How they arrive at these figures is beyond me. Some time back a former client's wife died leaving a sizable estate but the heirs needed no certification but then sizable parts of her estate passed directly by transfer on death setups and county land taxable land values are largely below market.

Form 8915-F when it's available.

Penalty waiver and 3-year spread provision was only for tax year 2020; it was not extended to cover tax year 2021.

And here is example of the statement: https://ttlc.intuit.com/community/business-taxes/discussion/re-2020-schedule-c-self-employed-how-to-report-ppp-received/01/2478497/highlight/true

That's a damn shame @cbslee. Wonder if they ever thought back to childhood memories and asked themselves, is this really what we've come to? Had a client who gifted shares of his company to his children. Easily worth millions. The son got mad at at his dad and sold these gifted, never earned them or worked a day in his life, shares to the minority shareholders, which then gave them the majority, and they eventually pushed the owner/dad out of his own company that he had built from the ground up. Most cold-blooded move I ever saw in my career.