7(a) Debt Relief Tax Treatment

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May 01, 2020

by a searcher from University of Virginia-McIntire - McIntire School of Commerce in New York, NY, USA

Does anyone have insight into how the 6 months of debt relief being provided to all 7(a) borrowers is being treated for tax purposes?

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commentor profile
Reply by a searcher
from Harvard University in 1970 Walton Dr, Burlington, WA 98233, USA
wages paid under PPP are not tax deductible. still waiting to hear on the existing 7a relief, but my guess is that, consistent with this guideline, none of the interest paid by sba will be tax deductible. https://www.irs.gov/pub/irs-drop/n###-###-#### pdf
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Reply by a professional
from Walsh College of Accountancy and Business Administration in Detroit, MI, USA
PPP loans that are forgivable are not taxable for federal income taxes. State implications depend on what conformity date to the Internal Revenue Code they adopted and other state laws that may apply to tax it. In addition, the IRS came out and said that expenses businesses pay to qualify for Covid-19 relief loan don't trigger deductions.
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