The PPP Thread

[jacoavlu]

The loan the practice took out did NOT include owner’s compensation in calculating the maximum loan amount.

I'm pretty sure in this situation you can actually go back and just revise the loan, to increase it to include owner compensation. Cleaner than having everyone get separate loans.

Note I am not a CPA or a lawyer.

[Mmd]

The loan the practice took out did NOT include owner’s compensation in calculating the maximum loan amount.

[GastroMastro]

Waiting on my bank. But probably waiting until 24 weeks have passed so I can get 100% forgiveness as a sole proprietor with no employees. I was told on BogleHeads to wait the 24 weeks.

My wife is a sole proprietor with no employee. Why must you wait 24 weeks for that? How much are you going to get? We are getting 8333.33x2

[jacoavlu]

Hi All.

So I am please looking for advice as to whether I can take out a ppp loan.

Our medical practice is in California. I am one of 3 partners. But the business structure is that each partner has an S-corp, and it is the 3 S-corps that own the medical practice.

Since our medical practice has received a ppp loan, I wonder/worry that my own S-corp is precluded from taking a ppp loan.

i can not find any rule or faq that addresses this concern directly. I assume that affiliation rules regarding business size are not an issue, since we are far under 500 employees.

Due to the growing number of Covid cases here in Southern California, I expect economic pain to continue.

I appreciate any thoughts/advice!

Did the loan your practice took out already not include owners’ compensation when determining maximum loan amount?

[Mmd]

Hi All.

So I am please looking for advice as to whether I can take out a ppp loan.

Our medical practice is in California. I am one of 3 partners. But the business structure is that each partner has an S-corp, and it is the 3 S-corps that own the medical practice.

Since our medical practice has received a ppp loan, I wonder/worry that my own S-corp is precluded from taking a ppp loan.

i can not find any rule or faq that addresses this concern directly. I assume that affiliation rules regarding business size are not an issue, since we are far under 500 employees.

Due to the growing number of Covid cases here in Southern California, I expect economic pain to continue.

I appreciate any thoughts/advice!

[Cubicle]

Waiting on my bank. But probably waiting until 24 weeks have passed so I can get 100% forgiveness as a sole proprietor with no employees. I was told on BogleHeads to wait the 24 weeks.

[CordMcNally]

Waiting on the bank.

[wfpbFI]

My understanding is that the loan amount (2.5 month payroll) can now be used for qualified expense over the 24wks (6 months). So if you've already had enough qualified expenses (at least 60% towards payroll) then yes you could apply for forgiveness now.

But, like you, our bank isn't accepting forgiveness applications just yet. So we are waiting on them too.

[Molar Mechanic]

We've had more than enough payroll in our partnership to get full forgiveness, but our bank isn't accepting forgiveness applications yet.

I pay myself from an LLC. If nothing changes, my wifes (who is not an owner) retirement contributions will put us over the top for full forgiveness. If that changes, we should get 75+% forgiven.

One question I haven't seen answered is if going to the 24 weeks to spend standard, is being back to full staff by the end of June good enough to go ahead and apply for forgiveness, or do we have to wait till the end of the 24 weeks?

[docnews]

Yes waiting on 24 weeks / more guidance.

[jacoavlu]

our business will wait to apply for forgiveness until at least later in what is now the 24 week period. There's no harm in awaiting further guidance, and particularly now with the change that S corp shareholder-employee health insurance premiums are no longer includable above the $100k yearly cap on compensation, we will need to utilize some utilities expenses and get clarity on profit sharing to get 100% forgiveness

[GastroMastro]

Time to revive this thread. Has there been anyone applying for and/or getting forgiveness yet? I have not heard from my bank yet about this, and yet my 8 week period is up. Please, if anyone has insight on this,would love to hear it, even if they have applied but not heard anything, or if they are instead waiting to apply until further guidance from fed govt!

[Molar Mechanic]

Interesting tidbit I got from the accountants this week. Their interpretation is that LLC owners can apply for forgiveness on $20,xxx, and no retirement benefits. Owners spouse, however, can claim forgiveness on $20,xxx, and retirement contributions can be submitted for forgiveness. If that stays true, it would allow us to get forgiveness on the whole loan. We'll see...the last time I saw a program with rules changing so fast I was in the military. For now, we'll just sit tight and see how things finalize.

[jhwkr542]

Hi, I am reviewing the PPP EZ Loan Forgiveness application: https://home.treasury.gov/system/fil...ion-3508EZ.pdf

I am confused by line 7 - if I calculated 60% of loan amount which is 16666.66*.6 = $10,000, then Line 8 seems to imply that my forgiveness is only $10,000, which is not correct. is this an error, anyone else having this issue?

As CordMcNally said, divide line 1, not multiply line 7. Your forgiveness amount has to be at least 60% payroll costs, so if your payroll is low, that will limit your forgiveness. Example:
Payroll costs $500k (line 1)
Other qualified expenses (lines 2-4) $600k

Total costs $1.1MM (sum of lines 1-4, line 5)
Loan $800k (line 6)
60% payroll = $833k (line 8, line 1/.6)

Forgiveness (line 8) = smallest of $1.1MM, 800k, 833k - so you'd get the whole loan forgiven in this example

[CordMcNally]

Hi, I am reviewing the PPP EZ Loan Forgiveness application: https://home.treasury.gov/system/fil...ion-3508EZ.pdf

I am confused by line 7 - if I calculated 60% of loan amount which is 16666.66*.6 = $10,000, then Line 8 seems to imply that my forgiveness is only $10,000, which is not correct. is this an error, anyone else having this issue?

Divide line 1 by 0.6, not multiply.