THE EVERETT ADVOCATE – WEDNESDAY, DECEMBER 23, 2020 Page 23 “YOUR FINANCIAL FOCUS” JOSEPH D. CATALDO NON-DEDUCTIBLE PPP LOAN-PAID EXPENSES loan back. The IRS also published Revenue Ruling 2020-27 which essentially states that the expenses paid for with PPP loan proceeds would not be deductible so long as the taxpayer T he Internal Revenue Service (IRS) released Notice 2020-32 thereby applying Internal Revenue Code Section 265 to Paycheck Protection Program (PPP) loans. Section 265, in a nutshell, states that expenses paid for with tax-exempt income will not be deductible. Once the PPP loan is forgiven, the IRS will not consider that forgiveness to be taxable “cancellation of debt” income. However, the IRS has now stated that the expenses paid for with the forgiven loan proceeds will not be deductible. Although this news is not what taxpayers were looking for, it is still better than having to pay the REFUND | FROM PAGE 1 Department’s refund request. “It’s still a matter that is under active consideration,” she said. In addition, the city’s Chief Financial Offi cer, Eric Demas, said DeMaria is still reviewing the district’s investment plan. Therefore, he said, the $471,140 will remain in the city’s free cash account until a decision is made. “reasonably expected” the forgiveness of the loan to be approved at the time of filing the 2020 tax return for the business entity or for Schedule C, Profit or Loss From Business. Therefore, actual forgiveness need not occur for the expenses to still not be deductible so long as the taxpayer had an expectation that there would be ultimate forgiveness. The IRS also published Revenue Ruling 2020-51, which provides a safe harbor for taxpayers that reasonably believed they would obtain 100% forgiveness of the PPP loan, but later it was determined that there would only be partial forgiveness. If, prior Vice President position In other news, the councillors voted 5-6 against creating a vice president position on the council for 2021. Ward 1 Councillor Fred Capone raised concerns about how that individual would be selected, adding that the president may not “see eye to eye” with the vice president. Ward 4 Councillor Jimmy Tri Li also spoke in opposition. “It feels like we could open up anto actually filing the 2020 tax return, a taxpayer receives word that only 75% of the PPP loan will be forgiven, then the taxpayer will be able to deduct 25% of the expenses paid for with the PPP loan proceeds on the 2020 tax return. If a tax return has already been filed, the taxpayer can either amend the 2020 return to claim the expenses that were originally not deductible or simply claim a deduction for those expenses on the 2021 tax return, assuming 2021 is the year that the amount of forgiveness is ultimately determined. The Commonwealth of Massachusetts has issued guidance that also makes it clear that expenses will not be deductible on a Massachusetts business entity tax return if they were paid for with proceeds from a PPP loan that was forgiven and not includible in taxable income. other can of worms,” he said. Councillor-at-Large John Hanlon agreed that the position is not necessary. “I’ve served with about 25 presidents, and I never heard any of them say they needed an assistant,” he said. However, DiFlorio said a vice president position would add depth to the council’s ranks and that it would be a good opportunity, particularly for the newer councillors. ~ Home of the Week ~ SAUGUS...1st AD Desirable Indian Valley offers this spacious 8+ rm. Split Entry Ranch featuring 3-4 bdrms., 2½ baths, beautiful granite kit. w/ granite backsplash, island & ceramic tile flooring open to dining area w/ slider to deck, large lvrm. w/ fireplace w/ pellet stove insert & wall A/C, bdrm. w/ half bath, finished lower level w/ fireplace fmrm., 4th bdrm., laundry rm. w/ full bath, exercise/bonus rm. & workshop, level lot w/ inground pool (liner 6-7 years old), cabana w/ electricity, storage shed, security system, great location! Offered at $629,900 335 Central Street, Saugus, MA 01906 (781) 233-7300 View all our listings at: CarpenitoRealEstate.com View the interior of this home right on your smartphone. 1. On Dec. 24, 1968, the crew of what became the first humans to orbit the moon? 2. The X in Xmas comes from what language? 3. What Danish-American comedian/pianist said, “Santa Claus has the right idea. Visit people only once a year”? 4. On Dec. 25, 1821, what Civil War nurse was born – “The Angel of the Battlefi eld”? 5. In 1886 who with a team developed a successful rabies vaccine? 6. What kind of dancing will appear at the Tokyo 2024 Summer Olympics? 7. What two holidays are on December 26? 8. Which animal cannot stick out its tongue, alligator or crocodile? 9. December 27 is the feast day of Saint John, who came from what region of Israel? 10. What 1990 movie is in the Guinness Books of World Records as the “Highest Box-Offi ce Gross – Comedy”? 11. On Dec. 28, Gustave Eiff el died, who designed the framework for what statue? 12. What is a baby goat called? 13. On Dec. 29, 1851, what youth organization based in Switzerland fi rst opened in America in Boston? 14. How are Nana, Max and Buck similar? 15. December 30 is annual Bacon Day; bacon (in the form of cured pork bellies) originated in what Asian country? 16. What 1700’s minister from Boston frequently ranted against celebrating Christmas, calling it “Mad Mirth”? 17. Since 2007 what kind of lights have been on Times Square’s New Year’s Eve Ball? 18. In what country would you celebrate Hogmanay at New Year’s? 19. Is a fi refl y a fl y? 20. On Dec. 31, 1935, a patent was given to Parker Brothers for what game in which “much of the interest…lies in trading and in striking shrewd bargains”? ANSWERS 1. Apollo 8 2. Greek (the letter called chi) 3. Victor Borge 4. Clara Barton 5. Louis Pasteur 6. Breakdancing 7. The English holiday Boxing Day and Kwanzaa 8. Crocodile 9. Galilee 10. “Home Alone” 11. Statue of Liberty 12. Kid 13. YMCA 14. They are fi ctional dogs (in “Peter Pan,” “How the Grinch Stole Christmas,” and “The Call of the Wild,” respectively). 15. China 16. Cotton Mather 17. LED 18. Scotland 19. No; it is a beetle. 20. Monopoly
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