pixel
You make the callBy: NATP Research
June 25, 2020

Question: If my client Eloise receives a Paycheck Protection Program (PPP) loan and the entire loan is forgiven, is she allowed a deduction for the business expenses she paid with the loan proceeds?

Answer: No. IRS Notice 2020-32 describes how business expense deductions are not allowed against loan income that was forgiven under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) §1106(b). Because loan proceeds are considered exempt income, taxpayers cannot take business deductions against this income.

COVID-19
Deduction
Estimated Tax
Federal Tax Research
Forms
Tax Act
Tax Law
Tax Season
Read more
penAbout NATP Research

NATP Federal Tax Researchers

Our on-site team of tax professionals answers more than 20,000 questions each year on a variety of federal tax issues affecting your clients. Our tax researchers are CPAs and enrolled agents with broad tax knowledge and access to the most diverse research library in the industry.

For research help, contact us at 800-558-3402, ext. 2 or submit your question on our online form.

Additional Articles

Categories