Insights

IRS Issues PPP Deductibility Guidance – Thanks Captain Obvious

November 20, 2020

The IRS released guidance on the deductibility of PPP loan forgivable expenses.  Here are the links to the Revenue Ruling and Revenue Procedure.  Essentially, if you are eligible and the loan is not yet forgiven or you have not applied for forgiveness, then you have to wait until the decision on the forgiveness is received to apply the deduction (i.e., no forgiveness in 2020, no expense deduction in 2020).  That would be nice if it was the middle of the year and you still had time.  However, we are a little more than a month from year end and many banks and borrowers are still slow with submitting and processing forgiveness applications, for good reason.

Moreover, there is little to no chance that Congress will enact another round of disaster relief legislation any time soon, which was supposed to have some type of fix for this very scenario.  Good luck with your 2020 tax filings if you have not received PPP forgiveness yet.  Please make sure you talk with your trusted advisor (accountant, attorney or whomever you use to do your books and taxes).  However, in the interim, I can’t help but think that Captain Obvious was part of the decision making process on this latest IRS guidance.

A few other items we thought were of interest:  

 

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As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.  

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