Randall

I got an alert and put my computer on pause for updates.

I thought the 1098Ts were changed a few years ago and much more accurate than in the past.

Whoa! Amazing.

Thanks. I noticed for the expenses, it added it back on my Ky return. Ky is working on this with legislation so I'll be holding it for awhile.

Thanks Tom. I've asked him to get me his account statements for January & February, 2021 to take a look.

Client went crazy trading in his account. 1099B has lots of wash sales. Disallowing these losses produces a gain of $28k. Just a paper gain. I know it's his own fault. But when looking at the individual transactions, I'm wondering if the previous loss is added to the basis of the next transaction. I really can't second guess the 1099B but I'm wondering if these are accurate. Anyone have any experience with this? The 1099B is from TD Ameritrade.

I tend to agree with Sara. I assume if the 1098T shows tuition paid and scholarships, the scholarships are used for the tuition. I'm not going around the world to work this maneuver.

I did notice if I enter the amount for expenses, it does carry to my Ky return as an add back. Ky agrees with the Fed regarding not counting it as income. But they are in the process of some legislation requirement to allow the expenses. I'm still waiting on that. So I assume ATX is adding it back until Ky changes.

In 1120S form. At bottom. Pages 1-5, then Options, then PPP Amounts.

ATX has a tab for PPP Loan forgiveness (S Corp). Two entries, one for the loan amount forgiven and one for the expenses used for business. When I enter this, I don't see where these amounts are carried to the return. Does this carry anywhere in the return? I entered the loan forgiveness amount in Sch M-1 and it automatically shows up in Other Additions under the AAA column on Sch M-2. Should I force it into the Other Adjustments column or just leave it in the AAA column.

Looks like I have 6 already filed with unemployment. Maybe someone in the House will actually have a practical thought in his/her head and this won't stay in the joint bill. Probably no such luck.

Oh, the tangled web we weave.

They're mad. The retroactive thing takes the cake. I too hope the IRS can just reimburse them. But probably not. I've printed out a list of those already filed, will check to see who got unemployment. Another list of those I've completed but not yet filed. I'll let them and the new ones coming in know ahead of time. They still have to make if final, IRS and software companies get updated. Then there's the states. I usually only deal with two, KY and OH.

WSJ is reporting 2020.

Somebody else posted that the exemption from income would apply to 2021, not 2020. Anyone hear any clarification on this?

In my case, she is a full time student.

Is she living outside her parents home? On her own? On $12k? I have one coming up. Daughter and granddaughter baby living with parents/grandparents. I'm thinking the parents have both daughter and granddaughter as dependents.

I understand from another forum that this does not include the unemployment insurance to be tax exempt retroactive to 2020. I understand that is separate bill proposed.

This whole thing seems crazy. I have clients coming in, made $200k, got a PPP loan for $50k, say what? Another basically retired, had a small W2 amount, got $26k in unemployment, another whose husband makes $250k, she had a pt job the past several years with a W2 of $2k, got $15k in unemployment. Whew. A painter client, just him, didn't get anything, said the trades had a banner year in 2020 and still got ppp money, it was a windfall. Sheesh. Maybe this is off topic, but whoa nelly.

Yes, it worked for me.

I do the same as Possi with ATX.

Made me change my mind, this was posted on another forum: To put in Paid in Capital would leave it on the balance sheet. The forgiveness is income not included in AAA because it's tax-exempt (call it OA if you want). The expenses do not reduce AAA because the are RELATED to tax-exempt income, so put them in your OA account if you use that. If your corporation was ever a C corp, or if you lose your S election later, accounting for it incorrectly could come back to roost. Actually, this was proposed on the Arizona list serve, and here is Ed Z's response: First, the tax law doesn't discuss the concept of paid-in capital--it's an accounting concept. The December 27 law and IRS Notice 2020-27 pretty clearly all this tax exempt income. And, finally, if this thing is a "capital contribution" and not tax exempt income, then the expenses would no longer be expenses related to tax exempt income--which is a disaster if you either have EA&P *OR* at some point terminate your S election (either intentionally or by accident). You are "short" AAA vs. cash you've had. That is, I see no advantage to putting it into that account and a whole lot of potential problem. And certainly don't see anything that requires this treatment. So I would strongly discourage going that route. But it doesn't matter what any CPE instructor says--what matters is what the law says. So find me the "paid-in capital" treatment in the law when the law pretty clearly says treat it as tax exempt income and treating it that way is pretty much mandated by SCOTUS's Gitlitz decision. We don't worry about running municipal bond interest (or Section 108 exclusions) directly to retained earnings or paid in capital--I'm not sure why everyone seems to want to complicate this one. We do know how to deal with tax exempt income in an S corporation (see my constant references to Section 1368(e)(1)).

On the other hand, is this an increase in basis? Has the shareholder put any of his own money into the business?

Thanks for the reminder.

I just wrote the loan off to Paid in Capital.