Lindquist, von Husen & Joyce LLP.

  • About
    • Mission & Values
    • Leadership
    • BKR International
    • Our History
  • Services
    • Audit & Attestation
    • Tax
    • Business Advisory & Other Services
  • Expertise
    • Affordable Housing & Real Estate
    • Not-For-Profits
    • Individuals & Families
    • Closely Held Businesses
    • Client Success Stories
  • Resources
    • Blog
    • Tax Guide
  • News & Events
    • Firm News
    • Events
    • Industry News
  • Careers
    • Benefits
    • Professional Development
    • Life at LvHJ
    • Meet Our People
    • Open Positions
  • Contact
  • Client Portal

Client Portal

Forgot password?

PPP Update: Timing and Tax Effects of PPP Loan Forgiveness

December 15, 2021   |   Posted in: Tax Laws, Timely News

US Flag with roll of bills on top of it.

On November 18, 2021, the Internal Revenue Service (IRS) issued a series of three revenue procedures (Rev Proc) to address various tax issues relating to PPP loan forgiveness.  

Rev Proc 2021-48 addresses the timing of receipt of PPP forgiveness tax-exempt income. Taxpayers may treat amounts that are excluded from gross income (i.e., tax-exempt income) as received or accrued:

1. as eligible expenses associated with the PPP loan are paid or incurred,
2. when an application for PPP loan forgiveness is filed, or
3. when PPP loan forgiveness is granted.

To the extent tax-exempt income resulting from the PPP loan forgiveness is treated as gross receipts under a particular federal tax provision, this revenue procedure applies for purposes of determining the timing and, to the extent relevant, reporting of such gross receipts.

Rev Proc 2021-49 provides guidance for partners and their partnerships for adjusting the partners’ basis in their partnership interests when there is PPP loan forgiveness. A partner’s basis in its partnership interest is increased by the partner’s distributive share of tax-exempt income and is decreased by the partner’s distributive share of deductions from expenditures giving rise to the forgiveness of the PPP loan. In addition, the Rev Proc 2021-49 also provides guidance for basis adjustments for stock of subsidiary members of consolidated groups when there is tax-exempt income arising from forgiven PPP loans.

Rev Proc 2021-50 allows partnerships that are subject to the centralized audit rules under the Bipartisan Budget Act of 2015 to file amended returns, if necessary, instead of an Administrative Adjustment Request, to adopt the guidance set forth in Rev Proc 2021-48 and Rev Proc 2021-49. Amended returns under this revenue procedure must be filed by December 31, 2021.

If you have any questions, please contact us at info@lvhj.com regarding your tax situation.

You may also be interested in our article about PPP expense deductibility.


 


Recent Posts

  • Prepare for Your Regional Center’s New Audit Team
  • Wondering what to include on your resume?
  • 3 Tips to Help Your Board Members Succeed
  • Due for an Audit? Identify Issues Sooner Not Later
  • Update Your CTCAC Compliance Forms

Categories

  • Affordable Housing
  • Business Advisory Services
  • Case Studies
  • Charitable Giving
  • Individual Tax
  • Not For Profit
  • Professional Development
  • Tax Laws
  • Timely News
  • Uncategorized

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • June 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017

Tags

Affordable Housing affordable housing financial statement audits Blog Blog Post board management California Careers charitable donations compensation major gifts Not for Profit Professional Development retirement planning succession tax Tax Credit Compliance tax reform

Connect with us on

  • About
  • Services
  • Expertise
  • Resources
  • News & Events
  • Careers
  • Contact
  • Client Portal
©2022 Lindquist, von Husen & Joyce LLP. All Rights Reserved.