S Corp Home Office Payment

[Bob_G]

I am a partner in a S Corp which pays each of its partners a fixed fee for the use of home offices (we have no offices as a company). This amount is reported to me on a 1099-MISC. I have an addition on my home which was made as a home office which i use specifically as my business office so I need to be able to deduct the cost of that space against this 1099 income. When trying to put this into TurboTax it wants to call this business income and report it on a Schedule C not as income reported on an Form 8829. How do i fix this?

[AmeliesUncle]

If the corporation is RENTING the space in your home, you report it as rental income.

If the corporation is just paying extra to compensate for your expenses, that should have been added to your W-2, not be reported on a 1099-MISC.

[rginnca]

Hmmm. I noticed the all caps RENTING. Its a small business but we have real tax people and we've always done it with a 1099-MISC. I always viewed it as home office reimbursement but maybe the distinction between those two is more important than i had considered. We dont have "rental agreements" or anything formal. Just a monthly payment in addition to our salary (which is called "home office rental" in our bookkeeping. Reimbursement of other stuff (paper, ink, computers) is done separately.

[AmeliesUncle]

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@rginnca wrote:

Hmmm. I noticed the all caps RENTING. Its a small business but we have real tax people and we've always done it with a 1099-MISC. I always viewed it as home office reimbursement but maybe the distinction between those two is more important than i had considered. We dont have "rental agreements" or anything formal. Just a monthly payment in addition to our salary (which is called "home office rental" in our bookkeeping. Reimbursement of other stuff (paper, ink, computers) is done separately.

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If the corporation is paying a fixed amount, and there is no indication that it is a rental arrangement, it needs to be on the W-2 as taxable income, not on a 1099-MISC.