Yes it does increase basis. There is no basis shown on an S Corp K-1, or on a 1065 K-1 for that matter. Tax basis capital on 1065 K-1s may or may not equal basis.
If the software is calculating shareholder or partner basis, I assume it would pick up this tax exempt income and add to basis, but I could be wrong. Haven't tested it yet. If it doesn't, I would input in the Other Increases to Basis line.
They added a field in Income (Screen 13) for the PPP loan. However, it doesn't work at all and doesn't show up anywhere. Entering it on M-1, as Other Tax-exempt Income, will carry it to Book Income, OAA, and Basis where it should be found.
So far, California treats the $1K EIDG grant as taxable income for California. Is there an input field in Lacerte to input taxable EIDG grant for California? In the Screen 16 for individual module Schedule C, I only see an input field to enter expenses paid with PPP loan. Nothing about the EIDG grant.
There is a place for PPP forgiveness in the 1120S and 1065, but not Schedule C (yet). The line for PPP forgiveness should include EIDL grants and loans, since they all the same for tax purposes, but it doesn't mention either one. There is suppose to be a line for nonconforming states, but it hasn't been implemented yet. Expenses paid with PPP money is a moot point after the 12/27 bill and should not be a factor anywhere.
Thank you. Sorry, but I made a "late night-working too long" boo-boo. The Inventory purchases were made with another, not PPP, loan. The PPP loan did pay the wages. Are the Wages reduced by the amount of the Forgiven PPP Loan? Or does that also go on the K-1, at line 16c? Appreciate your help!