USA PPP loan and retained earnings on 1120S Schedule L

[MarcScorp]

Hi,

I have a S corporation with approximately $270,000 of gross receipts.

I have benefited from a PPP loan of $10,000. It was forgiven. As it is tax-exempt income, it doesn't appear on the form 1120S calculation and not on the profit/loss calculation.
As I understand it, the PPP loan amount should increase my shareholder's basis and it should appear on the schedule M2 in the OAA.

The question is: On the schedule L, do I add it to the retained earnings, line 24, or to the adjustments to shareholders' equity, line 25?

 

[MoralesTax]

It should be included as Retained Earnings Line 24, not separate as an adjustment on Line 25. It is indeed Tax-Exempt Income, should be reflected on Line 5a of Sch M-1. You are correct that it increases your basis and it should also appear under the OAA cloumn in Sch M-2.