CLA article offers guidance on PPP loan forgiveness timing

CliftonLarsonAllen (CLA) has released a new article addressing the three recently issued revenue procedures by the Internal Revenue Service (IRS) providing guidance with respect to the timing of tax-exempt income from PPP loan forgiveness and from certain grant proceeds and subsidized payments of principal, interest, and fees.

CLA says owners of partnerships and S corporations receive a basis increase for their share of the tax-exempt income.

"For taxpayers with insufficient basis or amounts at-risk, timing can impact the ability to deduct losses or to distribute funds to owners tax-free," the company says. "The timing also affects the computation of average annual gross receipts for determining if the entity is a small taxpayer entitled to simplified accounting methods."

CLA says the three new revenue procedures are 

  • Rev. Proc. 2021-48
  • Rev. Proc. 2021-49
  • Rev. Proc. 2021-50

For more information about each procedure, and guidance from CLA, please go to

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