this is from IRC 280A
(2)PERSONAL USE BY SHAREHOLDERS OF S CORPORATION
In the case of an S corporation, subparagraphs (A) and (B) of subsection (d)(2) shall be applied by substituting “any shareholder of the S corporation” for “the taxpayer” each place it appears.
(d)(2)PERSONAL USE OF UNITFor purposes of this section, the taxpayer shall be deemed to have used a dwelling unit for personal purposes for a day if, for any part of such day, the unit is used—
(A) for personal purposes by the taxpayer or any other person who has an interest in such unit, or by any member of the family (as defined in section 267(c)(4)) of the taxpayer or such other person;
further areas of the home that are used for both personal and business use are treated as personal-use areas. no portion can be considered business-use - Anderson TC Memo 2006-33.
what this may imply is that even if the S-Corp pays fair rental to you, the S-Corp could be denied any deduction. as to the S-Corp issuing your a 1099, this may be required because you have a business paying rent to a non-corporate entity - yourself.
