Discussion:S corp, self rental, no basis and losses
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Revision as of 17:38, 7 May 2009
Discussion Forum Index --> Advanced Tax Questions --> S corp, self rental, no basis and losses
Discussion Forum Index --> Tax Questions --> S corp, self rental, no basis and losses
| 7 May 2009 | |
| For years client has operated an S corp that perpetually has losses. Although SH loan is significant and most of the losses have been allowed, it's likely that this business will not show a profit anytime in the near future, if ever. This S corp - 100% owned by H - rents office space, which is owned by the H/W. The rent is ~FMV but there was a small, suspended loss in 2007 and may also be in 2008. Because of the losses in the S corp, part of which is created by the rent expense, he may not have enough basis to deduct on 1040. It seems ridiculous to increase the S corp losses, not be able to deduct (now or ever) and also have losses on the self-rental on 1040, which are not deductible. I'd like to have him stop paying rent from the S corp to him, deduct the mortgage interest, as investment interest, and property taxes on Sch A. There must be a reason for not doing this, if someone would please help with this. Thank you. | |
