Update on Tax Deductions Related to PPP Loan Forgiveness
Today, the IRS issued Revenue Ruling 2020-27 and Revenue Procedure 2020-51. Particular problems will arise in handling situations where it is expected that the PPP loan will be forgiven, but that forgiveness has not yet occurred, by the end of the year (Dec. 31). Also, for taxpayers with fiscal years that have already ended, yikes!
I also found out that the AICPA and about 80 other organizations have sent a letter to four members of Congress offering comments and suggestions on SBA Form 3509. These letters were sent to House Representatives Nancy Pelosi and Kevin McCarthy, Senators Mitch McConnell and Charles Schumer and also to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
Here are the links to IRS documents … Revenue Ruling 2020-27: https://www.irs.gov/pub/irs-drop/rr-20-27.pdf and Revenue Procedure 2020-51: https://www.irs.gov/pub/irs-drop/rp-20-51.pdf
READ MOREForm 970 Draft
The IRS has posted a revision to Form 970 – Application to Use LIFO Inventory Method – in Draft form. The Draft is dated November 2020, and it is not to be filed with the IRS.
Form 970 is to be used in making LIFO elections. For example, if you are going to elect LIFO for used vehicles, you would file Form 970, even though new vehicles are already on LIFO.
The current Form has a revision date 8 years earlier (November 2012). If you are going to elect LIFO in 2020, be sure to check the IRS website because the IRS may finalize the Draft Form 970 by the time you file tax returns for 2020.
View the Draft form at https://www.irs.gov/pub/irs-dft/f970–dft.pdf
READ MORE