Lee B

"However, hours spent in the owner’s capacity as an investor, such as arranging financing, procuring property, reviewing financial statements or reports on operations, and traveling to and from the real estate, will not be considered hours of service for the enterprise."

I suspect that it has to do with the college's benefit package provided to employees, which probably says something like, "dependents of full time employees can attend tuition free."

Meh, the two bills haven't been reconciled yet

Wow, my mind boggles. Wait I'm on west coast, it's way too early this stuff ! Aaagh

My off the cuff answer is yes deductible !

The online class I took Wednesday from the OSCPA actually addressed this issue. According to the presenters, other interest is an allowable expense, but it is not a forgiveable expense !

In addition, neither of these bills addresses the issue of the non deductibility of expenses paid with the proceeds of a forgiven loan, which was not the intent of Congress. This whole PPP loan situation reminds me of when I was kid watching "The Three Stooges"!

If they make some of these changes, are they going to be retroactive, because my largest client's 8 week window ends on June 10th. Conversely, my second largest client just received their funds today and under current law, their window begins today and ends on June 30th. It's impossible to plan when the goalposts keep moving, not one, not twice, not three times, I'm sure I have lost count. This is the most insanity I have ever seen in my 44 years of accountancy !

I just finished taking another look at the Drake Accounting Payroll Function. Probably the biggest improvement is that they now efile Forms 94x. They finally recognized that their software wasn't handling Oregon's Statewide Transit Tax and Worker's Benefit Fund correctly. I understand that Oregon is a smaller state clear across the country, but you shouldn't advertise that your software is efile compliant in all 50 states, when it isn't !!! Had a long conversation with a very nice support person. I will check back again next May to see if they had made enough improvements to make the software's live payroll functional enough for me to use in Oregon.

I have spent the last 4 weeks babysitting 2 PPP Loan Applications thru 2 FinTech Companies for my 2nd largest client. Finally today,one of the loans finalized and the funds were deposited in my client's checking account today. What a frustrating experience, hours of dealing with poorly designed websites, days of waiting with no feedback. Too many phone calls, talking to people who only knew the basics of what they were trying to do. All because the large regional bank, where my client has been a customer for over 20 years gave my client no help, no encouragement, and didn't even return phone calls. I did my first application for my largest client with a small local bank back on April 2nd, it took me an hour at most, a piece of cake. The documentation requirements for these last two applications increased exponentially. Now all I have to do is fill out the forgiveness applications, which appears to be way more challenging! I really need a vacation !

I have a client who has 2 commercial rentals and 6 residential rentals. For the past 2 years I have used the "Safe Harbor Rules" for the residential rentals. The "Safe Harbor Rules" are restrictive since you cannot group commercial rental and residential rentals together. Also this client meets the 250 hours for the residential rentals, but not for the commercial rentals which is annoying because the majority of the profits come from the 2 commercial rentals. I am going to sit down with this client to review whether the "Trade or Business" approach would be a better way to go instead continuing to use the "Safe Harbor Rules". Frankly, I am not seriously concerned about the risk of audit.

IMHO, based on the CPE seminars that I have attended and the lengthy tax expert articles that I have read, the level of facts & circumstances needed for the ownership of rental to be considered a "trade or business" is higher than just intending to make a profit.

Health Insurance, Dental Insurance, Long Term care Insurance & all Medicare premiums. (Pub 535 )

With respect to rentals being a trade or business there is no one specific cite. There are some court cases, probably one of the most important going back to the early 1940s. You need to do some online searches, there are a number of in depth analyses by various tax experts.

I was not aware that social security provided any insurance ?

Thank you for making realize how fortunate I am that my practice is primarily small business write up, payroll and business entity tax preparation.. I just counted and I only have 6 non business 1040s that I do and 3 of those used to be business returns. Truly, I have not had a single one of these calls. Now I feel like I am sitting underneath a Double Rainbow !

Copied from The Tax Advisor: How to make the IRC Sec 266 election? You can make the IRC Sec 266 election when you are filing with original return for the year for which the election is made with the following statement: “For tax year ………., taxpayer hereby elects under Code Section 266 and IRS Regulations 1.266-1 to capitalize, rather than deduct, property taxes, mortgage interest, insurance expenses, and other miscellaneous carrying costs on the property at ……………………………… Remember the Section 266 Election is an annual election available for Investment Property.

Actually the CARES ACT didn't say keep it, it just didn't say anything to tell the IRS not send these checks.

Copied from the Journal of Accountancy: AICPA Says Treasury and SBA PPP Loan Forgiveness Application Leaves Many Questions The forgiveness application form does help address some administrative items such as providing additional clarity around “costs incurred but not paid” during the covered period, which is aligned with a recommendation by the AICPA. May 19th, 2020 The Treasury Department and Small Business Administration have released a loan forgiveness application form for the CARES Act’s Paycheck Protection Program (PPP), which had been urgently sought by CPA firms and their small business clients in recent weeks. The document and related instructions partially address some outstanding issues but leave others unaddressed and, more importantly, still do not provide enough flexibility for those who receive funds, according to the American Institute of CPAs. The forgiveness application form does help address some administrative items such as providing additional clarity around “costs incurred but not paid” during the covered period, which is aligned with a recommendation by the AICPA. However, major issues remain. In particular, small businesses need flexibility on when the 8-week period should start or need to have the covered period extended to more than 8 weeks. “It’s clear the application form and instructions provided yesterday are not enough,” said Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s business and technology arm. “Some of the most pressing issues are not addressed and in other areas it appears new questions have arisen.” As the AICPA has emphasized throughout this process, questions surrounding guidance make critical decisions unnecessarily challenging and complex for PPP loan recipients and those who are considering applying for the program. That’s why the AICPA created a loan forgiveness calculator this week that reflected both SBA guidance at the time and additional recommendations from the institute. Both the calculator and the underlying recommendations were designed to create a commonly accepted approach to PPP loan forgiveness, and were made in consultation with an AICPA-led small business funding coalition whose members provide services and support to businesses that employ more than 75 million people. “The AICPA loan forgiveness calculator provided more support and details than the SBA loan forgiveness application, and we will continue to encourage Treasury and SBA to leverage our recommendations,” said Mark Koziel, CPA, CGMA, the AICPA’s executive vice president of firm services. “We will now reconcile our calculator with this form and publish an updated version with additional recommendations and direction for our 44,000 CPA firms.“ The updates to the AICPA forgiveness calculator are expected to be available by Monday. The revised calculator will be available at www.aicpa.org/SBA. In addition, the AICPA will be reviewing in detail the loan forgiveness application along with our updated recommendations at the AICPA’s weekly Town Hall Meeting this Thursday."

I would really prefer not to use an out of cycle payroll !

I wholeheartedly agree. I make a donation every year and the benefits that I receive being a member of this community far exceeds the dollars that I donate!

Exactly, years ago I picked up some new clients who included 3 brothers who jointly owned some commercial rental property. The CPA who had previously prepared the returns had treated the situation as a joint venture reported on the Schedule E of each brother. I followed the joint venture approach for several years, until the IRS sent my clients a letter forcing them to file a Form 1065.

It appears that due to intense criticism and pressure, that there will be significant changes to the PPP Loan and forgiveness process. We will have to see what happens.

Every client that has a PPP Loan will be receiving their lender's version of this form to fill out, so while this will be a good reference it will not be the form our clients will actually fill out.

I just finished skimming thru the forms and instructions for the PPP Loan Forgiveness Application. My largest client is a multi-location restaurant with 70 employees. This will be just as time consuming as preparing their Form 1120 and they have hundreds of assets. Currently I have 4 clients that have received a PPP Loan and 2 more that are waiting to be finalized. I think the absolute minimum I would charge to do one of these applications is $500 and that's for a client with 2 or 3 employees. For larger clients this will be a lot of work. Now I know what I will be doing next month.