Has anyone encountered this? I calculated an ERC for a client who received a PPP loan that covered part of the quarter wherein they qualified for the ERC. One of the rules for using PPP proceeds is that if the business pays rent to a related party, instead of reducing the PPP proceeds by the rent, it must be reduced by the mortgage interest on the rented premises. In this case there are two 50% owners of the ERC business. One of those owners is a 50% partner in the real estate LLC owning the rented premises. Therefore instead of using solely the mortgage interest, I reduced the PPP proceeds by 1/2 of the monthly rent, and 1/2 of the mortgage interest paid (since one of the partners is an unrelated party). I couldn't find anything in writing on this and wondered if anyone else has seen this. TIA.
10-Jan-2023 11:49am
