IRS issues final forms, instructions re S corporations

January 25, 2022

The IRS recently issued a few items related to S corporations, including Form 7023 and final instructions for the 2021 Form 1120-S.

S corporation shareholders use Form 7023 to report and track their basis in the S corporation stock. The IRS explains when shareholders must file Form 7023 with their tax return in the instructions.

The IRS also issued final instructions for the 2021 Form 1120-S for S corporations’ annual tax returns. The instructions explain the reporting requirements for forgiven Paycheck Protection Program (PPP) loans.

The 2021 Form 1120-S instructions also address the accumulated adjustments account (AAA) of an S corporation and how to treat PPP loan forgiveness and related expenses in Schedule M-2 of Form 1120-S.

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