gats1016
Level 3

My clients are an S-corp with a business loan thru their bank.  They have had the loan for a couple of years.  In April they received a letter from the bank saying due to the CARES act the bank, with the help of the SBA would be making payments on the loan for six months.  This is not a PPP Loan nor is it an EDIL.  So for six months a payment of $966.35 was applied to the loan.  For bookkeeping and tax purposes what do I do with this?  Is this debt forgiveness making it taxable income to the shareholders?  How is it written off on the books?  Any guidance would be appreciated.

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