2020 Year-End Tax Guide

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MISCELLANEOUS Related party rent limitation:

Many business owners applied for Paycheck Protection Program loans in order to maintain payroll during the COVID-19 pandemic. The deadline to apply for a PPP loan was August 8, 2020. The SBA will fully forgive all PPP loans, provided that all borrower and documentation requirements are met. There is currently speculation that there may be a second draw for PPP loans for certain industries that have been especially hard hit by the pandemic, which presumably would include the food and beverage industry. There is also speculation that PPP loans of $150,000 (or less) will be forgiven automatically. We do not expect definitive resolution of these and other related questions until after the November elections. Marcum can guide your company through the applicable regulations, as it continues to evolve. For questions and assistance, contact your Marcum professional or visit us online.

X If the lessor and lessee of a property are related, only the mortgage interest--not the rent paid--is an expense eligible for forgiveness. The lessee or the lessor can claim the interest, but not both. If there is no mortgage, then there is no eligible expense. Transportation costs: X Per the Treasury FAQs, a service for the distribution of transportation refers to transportation utility fees assessed by state and local governments. Payment of these fees by the borrower is eligible for loan forgiveness. EIDL Loans and Advances and the PPP: X Loans under the SBA’s Economic Injury Disaster Loan program and advances can be used for payroll if used outside of the PPP covered period.

X If you received an EIDL advance, it will reduce the forgiveness of your PPP loan by the amount of the advance. If the advance was greater than the PPP loan, there will be no forgiveness of the PPP loan.