IRS Clarifies Timing, Allocation Of Forgiven PPP Loans
The IRS released guidance last week clarifying when amounts excluded from gross income in connection with forgiven Paycheck Protection Program (PPP) loans are considered received or accrued for tax purposes and how partnerships should allocate such amounts–
— Rev. Proc. 2021-48 said amounts excluded from gross income in connection with forgiven PPP loans can be treated as received or accrued when the relevant expenses are incurred, when the application for forgiveness is filed or when the loan is forgiven.
— Rev. Proc. 2021-49 described how forgiven PPP loan amounts are allocated among the partners in a partnership as well as the corresponding adjustments made to the partners’ bases.
— Rev. Proc. 2021-50 said partnerships could file amended returns to adopt the guidance set forth in the revenue procedures.