How a Dairy Child Becomes a CPA
I think you will enjoy the video.
On another note, there is more and more chatter that the IRS will issue guidance shortly on whether expenses forgiven under the PPP program will still be deductible.
The IRS has stated that the expenses are not-deductible due to Section 265 of the Code which states you can’t deduct expenses incurred related to tax-free income.
They have also informally stated that since their is a reasonable chance that the expenses will be reimbursed via PPP loan forgiveness that the expenses can’t be deducted in 2020 even if the loan is still on the books.
We are not sure how they can assert that. The expenses are not going to be reimbursed. The CARES Act simply made PPP loan forgiveness non-taxable. It did not change the character of the expenses. There is no reimbursement of expenses, simply tax-free income.
Hopefully, the Lame Duck Congress will get their Act together and pass a bill making the expenses deductible. It is hard to do year-end tax planning when we don’t know the outcome on this issue.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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