Finally some IRS guidance on PPP for 2020

Nov 19, 2020

Just yesterday, the IRS has confirmed that taxpayers with a reasonable expectation of PPP loan forgiveness may not deduct expenses paid with those funds, even if the forgiveness has not been granted prior to the end of the taxable year. (Rev. Rul. 2020-27)

The IRS states that because taxpayers calculate their forgiveness based on eligible expenses paid with PPP funds, the forgiveness of the loan amounts used for those expenses is reasonably expected to occur, and under IRC ┬ž265 taking the deductions would be inappropriate.

OK so lets get back to tax planning as the year end is fast approaching. How does this change your 2020 tax due?

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