Question

Form 1120-S

Forum|Forum|5 years ago
February 13, 2021
1 reply
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My PPP Loan was forgiven in 2020. Do I enter the amount and check yes on Line 12 of Schedule B on Form 1120-S as a debt that was forgiven? It appears to be an information line only, and does not affect any other amounts. I believe the PPP Loan amount also is reported on line 16, code B of the Shareholder K-1 as non taxable income that affects shareholder basis. Is that correct? When I entered the PPP Forgiven Loan amount as Other timing Income item on the Schedule M-1, it balanced out my income tax/book diferences and also moved it to Schedule M-2 as an addition from the M-1 and as a negative Distribution to balance out the M-2 with my books. Everything appears to be in balance.

TurboTax Business Windows

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ThomasM125

You are correct, assuming the debt was forgiven, you would answer "yes" to the question on line 12. It does get entered on line 16 of schedule K and the steps you took have allowed you to reconcile your balance sheet.

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