it will be a profit -
I will get a K1 form
Then so long as you meet the regular and exclusive tests for your use of the office, and your employer requires you to have an office, you can deduct home office costs up to the amount of your income from that source.
Caution: The IRS expects that shareholder's receiving income from an S-Corporation will receive wages equal to the value of their services. Their concern is that distributions only is a way of avoiding social security taxes.
While you suggest your work is philanthropy, it would only be so if the entity is a non-profit entity organized under Sec. 501(c)(3) of the statute. Non-profit entities file Forms 990, not Forms 1120-S.
Suggestion: Have the majority shareholder meet with a tax professional as it sounds like he has some issues he needs to straighten out.
