Discussion:S Corp Home/Office Expenses
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Revision as of 19:33, 26 December 2006 DianeOffutt (Talk | contribs) (My S-Corp client) Next diff → |
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| The expenses paid by the corporation should be deducted on the 1120S, subject to the net income limitation.}} | The expenses paid by the corporation should be deducted on the 1120S, subject to the net income limitation.}} | ||
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| + | {{ForumReplyPost|UserID=DianeOffutt|Date=26 December 2006|Text=My S-Corp client operates the business out of his home (no other office is available OTHER than his home). He is a 25% shareholder and the other shareholders understand the need for this arrangement. He is charging the corporation for the expenses such as a portion of the DSL, utilities and telephone pertaining to the S-Corp usage. The S-Corp will deduct these expenses on the 1120S form. Just want to confirm this for my research on this subject seems to have conflicting information. | ||
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| + | Thanks to all.. | ||
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| + | Diane Offutt}} | ||
Revision as of 19:33, 26 December 2006
Discussion Forum Index --> Tax Questions --> S Corp Home/Office Expenses
| 7 February 2006 | |
| I have a S Corp client who conducts his business related administrative activities from his Home/Office. Should the propotionate Home/Office expenses be shown on his 1120S Corp. Tax Return or on his 1040 Personal Tax Return (Form 8829)? | |
| 7 February 2006 | |
| According to TAx Court (Croft, TC Memo 2005-197), we would have to deduct these home office expenses on Sch A if they are on F1040. They seem to be telling us to deduct at the corporate level. Should we calculate deductible mtg. int, real estate taxes, home depreciation (even though not owned by s-corp), and automobile expenses (even though not owned by s-corp) on F1120S? We'd have to book them as payables to or contributions from shareholders. The depreciation may not be allowed since house and car are not owned by the S-corp.
The other alternative I've thought about is to simply calculate a "rent" expense amount for the s-corp to deduct but then the owner has to pick up income...defeats the above-the-line deduction. posada | |
| 7 February 2006 | |
| Renting part of a home to a closely held S-Corp is very common. The individual does have to pick up rental income, but they also can deduct the depreciation, utilities, Mort Int, RE taxes, etc. attributable to this part of the home on SchE. Otherwise, the taxpayer cannot deduct utilities or depreciation for that part of the home used for business. | |
| 8 February 2006 | |
| Renting a home to a closely held S-Corp is common, but where the home owner is an employee of the renting S-Corp employer, any expenses other than interest and RE tax would be non-deductible under 280A(c)(6). | |
| 8 February 2006 | |
| Back to my original question - my S Corp client owner does not rent his Home/Office to the Corp. Can he still deduct the Home/Office related utility bills, landline, etc. expenses on his 1120S tax return? Or does he have the option to do that on his 1040 (thru Form 8829)? Thanks. | |
| 9 February 2006 | |
| The expenses paid by the officer/shareholder (including depreciation) should be deducted on Sch A, subject to the 2% limitation and subject to the wage limitation.
The expenses paid by the corporation should be deducted on the 1120S, subject to the net income limitation. | |
DianeOffutt (talk|edits) said: | 26 December 2006 |
| My S-Corp client operates the business out of his home (no other office is available OTHER than his home). He is a 25% shareholder and the other shareholders understand the need for this arrangement. He is charging the corporation for the expenses such as a portion of the DSL, utilities and telephone pertaining to the S-Corp usage. The S-Corp will deduct these expenses on the 1120S form. Just want to confirm this for my research on this subject seems to have conflicting information.
Thanks to all.. Diane Offutt | |
