California, Sole Proprietor, Schedule C (no employees) got a $5,200 PPP Loan, which has been forgiven.
The calculation of the loan has been based on the net income of the Sole Proprietor.
Now comes the story that California wants the deduction of the business would be reduced by the amount of the exclusion allowed under PPP. How technically to bring this deduction on Schedule C, the business has no kind  of expense which is more than the loan amount ($5,200).