Question
Suppose Marley took advantage of the relief that was available to small business owners during the COVID-19 pandemic and received a Paycheck Protection Program (PPP)
Suppose Marley took advantage of the relief that was available to small business owners during the COVID-19 pandemic and received a Paycheck Protection Program (PPP) loan in the amount of $5,000. What impact would this have on her 2020 tax return?
A) None.
B) Marley will have to report the loan proceeds as income if she wants to deduct the costs of the materials that she purchased with the loan proceeds.
C) The tax preparer will enter the amount of PPP loan proceeds received on the appropriate line on the Schedule C. Although these funds are not taxable, Marley will be able to deduct the costs of the supplies she purchased with the loan proceeds.
D) The expenses purchased with the PPP loan proceeds are not deductible and therefore Marley does not need to keep any records on what she did with these funds.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started