Form 1120S PPP loan forgiveness reporting

I have read a few sources on this topic in these two days and I believe now I have a pretty good idea of how PPP loan forgiveness is to be reported on Form 1120S. Just want to make sure I do not miss anything.

(Schedule L and Schedule M-1 are not required in this tax return).

(1) Loan forgiveness amount goes on Form 1120S, Schedule K, Line 16b.

(2) Loan forgiveness amount goes on Schedule M-2, Column (a) Line 3 'Other additions' and use 'Expenses paid with forgiven PPP loan proceeds' as description.

(3) Loan forgiveness amount goes on Schedule M-2, Column (d) Line 3 'Other additions' and then back out on column (d) Line 5' other reductions'

(4) Loan forgiveness amount goes on shareholder's Schedule K1, Line 16 "Items affecting shareholder basis' with code (B) 'Other Tax-Exempt Income'.

(5) Attach a statement to the tax return in accordance with RP2021-48.

Have I listed everything that needs to be done? Please point it out if I have missed anything. Thank you in advance.

Anyone who is familiar with PPP forgiveness reporting can help? Thank you in advance.

Looks good to me. The only other thing I would think of is that you be sure to increase the shareholder's basis by the amount of the tax-exempt income.

Either I've missed a lot or you're going waaaay overboard.

ALWAYS do a Sch. L and M-1, by the way. Come on. NO reason not to.

All I do is enter an M-1 Adjustment for the PPP forgiveness......and as I think about it, that's it.

Either I've missed a lot or you're going waaaay overboard.

ALWAYS do a Sch. L and M-1, by the way. Come on. NO reason not to.

All I do is enter an M-1 Adjustment for the PPP forgiveness......and as I think about it, that's it.

So I use Pro-Series and it automatically puts in in the M2 other area. I cant remember, but I looked at that and deemed it correct.

Also, the OP is correct, there is a small disclosure for the PPP. I use Pro Series statements and simply make a very brief statement that satisfies what the OP wrote.....

Attach a statement to the tax return in accordance with RP2021-48.

ALWAYS do a Sch. L and M-1, by the way. Come on. NO reason not to.

I totally agree. If you don't reconcile your L & M-1 & M-2, you probably are getting something wrong, like distributions or something.

All I do is enter an M-1 Adjustment for the PPP forgiveness......and as I think about it, that's it.

Check page 45 of the IRS instructions to Form 1120S. OP is correct.