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PPP Loan Rules

paradise

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I know one Co. in Havasu got 99K for a business she had already closed down. I think that is just wrong.
She wouldn't qualify for forgiveness on that amount based on the rules. She would either have to pay the loan back or keep it and make payments with interest
 

DLC

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How do you qualify for forgiveness if you don’t even use the loaned money?

asking for a friend
 

WYRD

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Expenses have always been deductible as they are expenses. The issue was whether or not the PPP funds would be seen as Income.
Can you post up a link to where your interpreting that?
 

LowRiver2

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She wouldn't qualify for forgiveness on that amount based on the rules. She would either have to pay the loan back or keep it and make payments with interest
Who decides the loan is paid back with interest ?
Some posters at the start of this thread made it appear no interest on paying back the PPP or expectation of repayment of the loan is required at all...
 

King295

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Expenses have always been deductible as they are expenses. The issue was whether or not the PPP funds would be seen as Income.
This is not accurate (I hear it all the time). The PPP forgiveness was always to be excluded from income however, the related expenses were what has been in flux.

CAA 2021 has clarified that the expenses are deductible. Here is a relevant link however, I recommend you all advise with your CPA. If your CPA is not advising you of these matters and you have a PPP loan you need a new CPA.... I might be able to help you with that.
 

DUNEFLYER

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So in English please..
With all rules being met, payroll and rents paid per % requirements etc...

Will PPP $$ that was direct deposited to my account be considered as income? (I was told yes, please confirm)

Will payroll and rents paid with the PPP $$ be deductible?

Thanks for any info
 

LowRiver2

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The PPP loans worked for sure but there is no doubt many people took advantage. The spectrum at which people took advantage goes from full criminal prison time down to shady gray area guy. I was in Havasu all summer and it was very clear that people took advantage from buying new boats, cars ,sxs motorcycle and even houses. I know of a few buisness owners including developers / contractors that took lots of money in PPP. The guys i know put it in a separate account and were holding it in case things went bad. Things didn't go bad for them and they paid it back. Some other buisness owners i know used it because they were legit affected and needed it to survive. I guess it depends on your up bringing and moral compass as to how people decide to play it during a horrible pandemic. But for the people that did the wrong thing... I wouldn't want to have to worry about the Feds and IRS coming for me thats for sure.
But , but, but.....inmates said that didn’t happen?🤣

Damn straight it happened and anyone in Havasu this summer that didn’t see, much less didn’t hear owners of this stuff discussing it, had some serious blinders on 🙄
 

ChumpChange

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But , but, but.....inmates said that didn’t happen?🤣

Damn straight it happened and anyone in Havasu this summer that didn’t see, much less didn’t hear owners of this stuff discussing it, had some serious blinders on 🙄
Nobody here said it didn't happen but you accusing businesses with no facts isn't a good look. You did read the second half of his post though, right? Or did you just read the first three sentences and declare yourself all knowing?

Sounds like someone is hell bent against PPP because a business he no longer reaps the benefit of got it and did well during the last year. Might as well burn down the peopl who needed it too?
 

ChumpChange

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This is not accurate (I hear it all the time). The PPP forgiveness was always to be excluded from income however, the related expenses were what has been in flux.

CAA 2021 has clarified that the expenses are deductible. Here is a relevant link however, I recommend you all advise with your CPA. If your CPA is not advising you of these matters and you have a PPP loan you need a new CPA.... I might be able to help you with that.
And while I was processing them I think we had it the other way around. I know it's been a while and we aren't processing the forgiveness portion of the loans as we sold off the portfolio to better service our customers with other business requests. That's why it's always nice to end a post with "but consult yoru CPA".
 

King295

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So in English please..
With all rules being met, payroll and rents paid per % requirements etc...

Will PPP $$ that was direct deposited to my account be considered as income? (I was told yes, please confirm)

Will payroll and rents paid with the PPP $$ be deductible?

Thanks for any info
PPP loan proceeds/forgiveness will not be included within income on your tax return. Again, a lot of people thought this was what was driving an add back from book to taxable income but it was actually the expenses that were going to be disallowed on your tax return.

CAA 2021 clarified that the expenses (payroll and rents) will be deductible for tax purposes. Again, call your CPA. If your CPA doesn't know, find a better one.

And while I was processing them I think we had it the other way around. I know it's been a while and we aren't processing the forgiveness portion of the loans as we sold off the portfolio to better service our customers with other business requests. That's why it's always nice to end a post with "but consult yoru CPA".
It was a complete whirlwind during processing, and it still is. Even on the assurance/audit side of things my days have been filled with fielding calls with clients and strategizing for year-end tax planning purposes as new info becomes available.
 

LowRiver2

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Nobody here said it didn't happen but you accusing businesses with no facts isn't a good look. You did read the second half of his post though, right? Or did you just read the first three sentences and declare yourself all knowing?

Sounds like someone is hell bent against PPP because a business he no longer reaps the benefit of got it and did well during the last year. Might as well burn down the peopl who needed it too?
No facts?

I have facts
Never got any benefits from my ex’s business
Like I said, three times in the thread, if a business profited and suffered 0 losses , they shouldn’t be taking the loan. You damn well know how easy it is to hide the money.
Take your little passive aggressive bullshit somewhere else.

At least you finally conceded it happened

Too many $150-350K new toys floating around this summer to say otherwise.

Not my job to present you with the shady moves some unethical folks did.

But true, I run at a much higher standard of transparency , I have a right to say it’s BS what some do to bend the rules on govt free cheese they didn’t need and have no Intention of giving back.
 

paradise

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Who decides the loan is paid back with interest ?
Some posters at the start of this thread made it appear no interest on paying back the PPP or expectation of repayment of the loan is required at all...
The PPP forgiveness application. You fill out the fields with your information, you upload your proof (941’s, account statements and payroll reports) that shows you used the funds for payroll or other covered expenses. There are limitations on how much you can claim for people the own the company, people that were paid over $100k/yr etc. once filling those out and following the formula you get your forgiven amount. You take your loan amount-forgiven amount and that’s what you owe back.

the lady in your example would be required to pay it all back now or take it as a loan since she wouldn’t have had any qualifying expenses. I have no doubt that some will fraudulently fill out the info to keep the money and hopefully they’ll be caught. Those are the same people trying to write off a $250k Ferrari as a marketing expense because the tax forms let them fill it in that way.

I do think that a lot of people don’t realize you can write whatever you want on your tax return. And it will work, until you get audited... :) I think people end up getting ‘trapped’ when no one calls them on their BS and they just keep pushing it more and more... Some of the shit I hear friends and acquaintances say is fucking crazy. People need to make sure they understand what they or their CPA is putting on those forms because the CPA has ‘0’ liability if you get audited...
 

LargeOrangeFont

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I have several friends that got the ppp loan and didn’t touch it set it in a separate account and sat on it, worked Business as usual and didn’t lay anyone off and at the end of the day the Loan was forgiven don’t need to repay it. They have to pay taxes on the income, it’s essentially free money To them.
So once they pay the taxes on it, THEN they can go buy the Lamborghini :).
 
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LowRiver2

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The PPP forgiveness application. You fill out the fields with your information, you upload your proof (941’s, account statements and payroll reports) that shows you used the funds for payroll or other covered expenses. There are limitations on how much you can claim for people the own the company, people that were paid over $100k/yr etc. once filling those out and following the formula you get your forgiven amount. You take your loan amount-forgiven amount and that’s what you owe back.

the lady in your example would be required to pay it all back now or take it as a loan since she wouldn’t have had any qualifying expenses. I have no doubt that some will fraudulently fill out the info to keep the money and hopefully they’ll be caught. Those are the same people trying to write off a $250k Ferrari as a marketing expense because the tax forms let them fill it in that way.

I do think that a lot of people don’t realize you can write whatever you want on your tax return. And it will work, until you get audited... :) I think people end up getting ‘trapped’ when no one calls them on their BS and they just keep pushing it more and more... Some of the shit I hear friends and acquaintances say is fucking crazy. People need to make sure they understand what they or their CPA is putting on those forms because the CPA has ‘0’ liability if you get audited...
Good post

The reality is there will be very little follow up on the loans due to the size of applicants

A $350k boat (random example), won’t be noticed like $1-2 million on trips and non material expenses. We’ve seen the large excess guys get reviewed but there are many who who played with less $ and will slide.
It’s ethics in govt. cheese eating , a shrinking commodity these days .
 

paradise

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Good post

The reality is there will be very little follow up on the loans due to the size of applicants

A $350k boat (random example), won’t be noticed like $1-2 million on trips and non material expenses. We’ve seen the large excess guys get reviewed but there are many who who played with less $ and will slide.
It’s ethics in govt. cheese eating , a shrinking commodity these days .
Agree to an extent but the nice part is they are requiring some backup (unlike a tax return) so it may be easier to spot check. We shall see
 

Done-it-again

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This is not accurate (I hear it all the time). The PPP forgiveness was always to be excluded from income however, the related expenses were what has been in flux.

CAA 2021 has clarified that the expenses are deductible. Here is a relevant link however, I recommend you all advise with your CPA. If your CPA is not advising you of these matters and you have a PPP loan you need a new CPA.... I might be able to help you with that.
king I’ve heard you work at RKE, is that correct? Brian Gose and Josh Ramsey Are working with our mess. Lol. It’s been a breath a fresh air from our previous firm.
 

BHC Vic

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I agree. But also consider that not every business owner went out and bought a boat, house or Lamborghini. Some of those business used the money as working capital to ensure jobs, and maybe hire more people as business was picked up.

As a business owner, if you offered me a low interest loan for working capital, the answer is always going to be “Yes I need it”. Especially with any financial uncertainty.

At a macro level all these funds were good for the economy as a whole, and injected money into the system.

As usual, the hypocrisy is laughable because the people complaining about businesses getting money they didn’t “need” went out and blew their first round of $600 personal covid money on Can Am parts or other junk because they didn’t “need” the $600, but cashed the check anyway.
What if we didn’t get any money at all? I have the same gripe... people love to bitch about me being a union guy. I didn’t take any hand outs from the government. They said I made too much, that’s cool. How many people that like to bitch about my job took the hand out?
 

BHC Vic

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Don't hate the players, hate the game i say. Funny they dont publicly post everytime a business owner sends in 6 or 7 figures in income tax annually, but the minute you take a PPP loan, forgiven or taken as a loan , they post your Business name all over the internet Because the MSM wanted to expose greedy business owners.
Everyone pays taxes on money they make. I paid a shot load last year... still didn’t get any hand outs
 

King295

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king I’ve heard you work at RKE, is that correct? Brian Gose and Josh Ramsey Are working with our mess. Lol. It’s been a breath a fresh air from our previous firm.
You are correct, I've been with RKE coming up on 8 years. Brian and Josh are great guys, glad to hear things are going smoothly. I sent you a PM.
 

Gonefishin5555

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The feds made the PPP thing completely tax free this week but California did not and will not conform
 

beertruck

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Tax Treatment: PPP loans will not be included as taxable income. Expenses paid with the proceeds of a PPP loan that is forgiven are now tax-deductible. This covers not only new loans but also existing and prior PPP loans, reversing previous guidance from the Treasury and IRS, which did not allow deductions on expenses paid for with PPP proceeds. In addition, any income tax basis increase that results from the borrower's PPP loan will remain even if the PPP loan is forgiven.
 

ChumpChange

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Can you post up a link to where your interpreting that?
My statement was referring to payroll expense. It is clear that you are talking about the 25% or so which could be used for other expenses while still making the loan forgivable. I processed applications but do not do forgiveness applications.
 

WYRD

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Tax Treatment: PPP loans will not be included as taxable income. Expenses paid with the proceeds of a PPP loan that is forgiven are now tax-deductible. This covers not only new loans but also existing and prior PPP loans, reversing previous guidance from the Treasury and IRS, which did not allow deductions on expenses paid for with PPP proceeds. In addition, any income tax basis increase that results from the borrower's PPP loan will remain even if the PPP loan is forgiven.
Ca is still disallowing the deduction on the expenses from what I am reading
 
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