Follow-up comments:
- You haven't provided clear facts on the ownership of S Corp B.
- How was the structure funded?
- What were the expectations of the $$ provided by S Corp A? Ownership or loan?
- S Corp A funding the overhead (mortgage, utilities, etc.) of the property purchased by S Corp B are not ordinary and necessary expenses of S Corp A and hence, not deductible by S Corp A. These expenses are either capital contributions (assuming a shareholder) to S Corp B or additional loans.
- I also agree that holding real estate in an S corporation is not the best structure.
- I believe you need to pause immediately and consult with a tax professional before you get too far down the road and have issues and tax consequences that could have easily been avoided.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
