Per the IRS' 2021 1120-S instructions, "An S corporation should include tax-exempt income from the forgiveness of PPP loans on line 3 and report expenses paid with PPP loans that are forgiven on line 5 in column (d) of the Schedule M-2."
We (and our Lacerte software) reported the 2020 loan forgiveness in the OAA, but not the related expenses. Any ideas on how to fix this for 2021 other than amending any 2020 return with PPP loan forgiveness? Can you simply adjust the beginning balance in each column to conform, or does a CY adjustment need to be made to shift the PY expenses from AAA to OAA?
https://www.irs.gov/pub/irs-dft/i1120s- ... Newsletter