Horizons Fall/Winter 2020

is allocable to one or more classes of tax- exempt income. The Service concluded that to the extent that Section 1106(i) of the CARES Act operates to exclude from gross income the amount of a PPP loan, Section 265(a)(1) of the Code disallows any otherwise allowable deduction for the amount of any payment of an eligible expense to the extent of the resulting PPP loan forgiveness (up to the aggregate amount forgiven) because such payment is allocable to tax-exempt income. Thus, if a taxpayer paid $80,000 of otherwise deductible expenses with PPP proceeds that were subsequently forgiven, while the forgiveness would not trigger $80,000 of taxable income, the borrower would be

denied a tax deduction for the $80,000 of expenses paid. As of the time of this writing, members of Congress remain determined to overrule the IRS by adding to future legislation the requirement that expenses paid with forgiven PPP funds be fully deductible. In summary, many organizations have spent their PPP funds and looking towards the future. Recent regulations, new legislation, PPP forgiveness rules and the ever-changing landscape are sure to keep businesses guessing as to what comes next. To stay up-to-date on the latest COVID-19 tax, consulting, and business advisory news visit www.RubinBrown.com/COVID19 .

What’s Next for Business? by Brandon Loeschner, CPA, CISA, CGMA

T he pandemic has been a huge shutdown based on state and local orders, create new safety protocols and procedures for physical access to workplaces and pivot business strategies in order to remain viable. Regardless of the status of your business and operations, many c-suite executives agree, a new strategic objective facing all organizations is the health and wellness of employees, vendors and customers. disruptor to the global economy. It has forced businesses to temporarily

Coupled with the fact that no one knows what is next, we must remain vigilant and flexible in our business strategies. Whether it is for operating in a ‘new normal’ or returning to pre-pandemic social interactions, there are numerous things on the minds of senior management. The following are a few of those topics senior management is discussing in virtual boardrooms.

Helping Businesses Weather A Pandemic

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