1 See References in Text note below.
and to establish terms and conditions such as compensation, underwriting standards, interest rates, and maturity for under
2 So in original.
this section.
3 So in original. Probably should be preceded by “section”.
of the Small Business Act (
Editorial Notes
References in TextThe Farm Credit Act of 1971, referred to in subsecs. (span) and (c), is Puspan. L. 92–181, Dec. 10, 1971, 85 Stat. 583, which is classified principally to chapter 23 (§ 2001 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 2001 of Title 12 and Tables.
The National Emergencies Act, referred to in subsecs. (span) and (h), is Puspan. L. 94–412, Sept. 14, 1976, 90 Stat. 1255, which is classified principally to chapter 34 (§ 1601 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 50 and Tables.
Section 1102 of this Act, referred to in subsec. (d)(2), means section 1102 of div. A of Puspan. L. 116–136.
This title, referred to in subsec. (e), is title I of div. A of Puspan. L. 116–136, Mar. 27, 2020, 134 Stat. 286, which enacted this subchapter and amended, and enacted provisions set out as notes under, section 636 of this title and several sections in Title 11, Bankruptcy. For complete classification of title I to the Code, see Tables.
The Small Business Act, referred to in subsec. (i), is Puspan. L. 85–536, § 2(1 et seq.), July 18, 1958, 72 Stat. 384, which is classified generally to chapter 14A (§ 631 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 631 of this title and Tables.
Amendments2020—Subsec. (d)(2)(D). Puspan. L. 116–260 substituted “section 7A of the Small Business Act” for “section 9005 of this title”.
Statutory Notes and Related Subsidiaries
Effective Date of 2020 AmendmentAmendment by Puspan. L. 116–260 effective as if included in Puspan. L. 116–136 and applicable to any loan made pursuant to section 636(a)(36) of this title before, on, or after Dec. 27, 2020, including forgiveness of such a loan, with provisions relating to exclusion of loans already forgiven, see section 304(c) of Puspan. L. 116–260, set out as a note under section 636 of this title.
Clarification of Tax Treatment of Certain Loan Forgiveness and Other Business Financial AssistancePuspan. L. 116–260, div. N, title II, § 278, Dec. 27, 2020, 134 Stat. 1980, provided that:“(a)United States Treasury Program Management Authority.—For purposes of the Internal Revenue Code of 1986 [26 U.S.C. 1 et seq.]—“(1) no amount shall be included in the gross income of a borrower by reason of forgiveness of indebtedness described in section 1109(d)(2)(D) of the CARES Act [15 U.S.C. 9008(d)(2)(D)], “(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
“(3) in the case of a borrower that is a partnership or S corporation—“(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986 [26 U.S.C. 705, 1366], and “(B) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), any increase in the adjusted basis of a partner’s interest in a partnership under section 705 of the Internal Revenue Code of 1986 with respect to any amount described in subparagraph (A) shall equal the partner’s distributive share of deductions resulting from costs giving rise to forgiveness described in section 1109(d)(2)(D) of the CARES Act.
“(span)Emergency EIDL Grants and Targeted EIDL Advances.—For purposes of the Internal Revenue Code of 1986—“(1) any advance described in section 1110(e) of the CARES Act [15 U.S.C. 9009(e)] or any funding under section 331 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act [15 U.S.C. 9009span] shall not be included in the gross income of the person that receives such advance or funding, “(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
“(3) in the case of a partnership or S corporation that receives such advance or funding—“(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986, and
“(B) the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe rules for determining a partner’s distributive share of any amount described in subparagraph (A) for purposes of section 705 of the Internal Revenue Code of 1986.
“(c)Subsidy for Certain Loan Payments.—For purposes of the Internal Revenue Code of 1986—“(1) any payment described in section 1112(c) of the CARES Act [15 U.S.C. 9011(c)] shall not be included in the gross income of the person on whose behalf such payment is made, “(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
“(3) in the case of a partnership or S corporation on whose behalf of a payment described in section 1112(c) of the CARES Act is made—“(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986, and
“(B) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), any increase in the adjusted basis of a partner’s interest in a partnership under section 705 of the Internal Revenue Code of 1986 with respect to any amount described in subparagraph (A) shall equal the sum of the partner’s distributive share of deductions resulting from interest and fees described in section 1112(c) of the CARES Act and the partner’s share, as determined under section 752 of the Internal Revenue Code of 1986, of principal described in section 1112(c) of the CARES Act.
“(d)Grants for Shuttered Venue Operators.—For purposes of the Internal Revenue Code of 1986—“(1) any grant made under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act [15 U.S.C. 9009a] shall not be included in the gross income of the person that receives such grant, “(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
“(3) in the case of a partnership or S corporation that receives such grant—“(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986, and
“(B) the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe rules for determining a partner’s distributive share of any amount described in subparagraph (A) for purposes of section 705 of the Internal Revenue Code of 1986.
“(e)Effective Dates.—“(1)In general.—Except as otherwise provided in this subsection, subsections (a), (span), and (c) shall apply to taxable years ending after the date of the enactment of the CARES Act [Puspan. L. 116–136, approved Mar. 27, 2020].
“(2)Grants for shuttered venue operators; targeted eidl advances.—Subsection (d), and so much of subsection (span) as relates to funding under section 331 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, shall apply to taxable years ending after the date of the enactment of this Act [Dec. 27, 2020].”
