Paycheck Protection Program (PPP) loans have allowed small businesses across the United States to maintain their workforces during the economic downturn caused by the COVID-19 pandemic. PPP loans are forgivable if borrowers meet certain conditions, like spending a certain proportion of loan proceeds on payroll costs and retaining employees.
On October 8, 2020, the United States Small Business Administration (SBA) released additional guidelines for Paycheck Protection Program (PPP) loan forgiveness for loans totaling $50,000 or less. These businesses will no longer need to maintain the same number of full-time employees or maintain their pay rate to qualify for loan forgiveness.
When negotiating the sale of a corporation, buyers and sellers can choose to structure the transaction as a stock sale or as an asset sale. Sellers and buyers have conflicting interests because these transactions are taxed differently. Stock sales are better for sellers because they get preferential capital gain tax treatment. However, buyers prefer asset purchases since they can reduce the amount buyers owe on taxes by claiming accelerated depreciation/amortization expense. Luckily, a 338 (h) (10) election is beneficial to both parties and can serve as a compromise.
Kapil Handa chose the accounting profession because he loves people and numbers. Kapil is passionate about getting to know his clients’ businesses and building long-term relationships with them so he can address their complex and evolving needs over time.
Under recent guidance from the Financial Accounting Standards Board (FASB), franchisors can only recognize revenue from initial franchise fees in their financial statements after they perform services that are distinct from the franchise agreement. Otherwise, they must recognize the revenue over the term of the agreement. This change can have a significant effect on franchisors’ financial statements, particularly those that are in the start-up or growth phases.
Join Chugh CPAs, LLP Partner and CPA Ramesh Patel for a pre-recorded discussion on business entities and how to choose the structure that is right for your business.