JohnH Posted September 1, 2022 Report Share Posted September 1, 2022 From an accounting perspective, this is simple. But I'm confused a bit about the 1120S instructions and recent developments. The client's S-Corp did not participate in PPP1, but obtained a $90k PPP2 loan in March 2021. They spent all the funds as appropriate within the required time in 2021, so fully forgivable. Full loan forgiveness was obtained in May 2022. Seems to me the $90K is simply a "Loan Payable" on the 2021 return with no other entries on the 1120S. Then the loan forgiveness, along with appropriate entries on the K, K-1, and M-1 will be reported on the 2022 Form 1120S. Am I right, or do I need to make any entries on the 2021 return other than the "Loan Payable" entry? 3 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 1, 2022 Report Share Posted September 1, 2022 That's the way I have handled my S Corp PPP loans. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 1, 2022 Report Share Posted September 1, 2022 See page 1 of the 1120-S instructions for your 3 options, and the Rev. Proc.: https://www.irs.gov/pub/irs-pdf/i1120s.pdf https://www.irs.gov/irb/2021-49_IRB#REV-PROC-2021-48 Quote Link to comment Share on other sites More sharing options...
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