But in this case the "They" (the S-Corp) is me and three other shareholders who have all joined together to use our talents to make a business. In the effort we have a small unheated wharehouse for storage and assembly of product, but shipping ad receiving is done by appointment. Both the ops manager and myself run the business and the other two shareholders do the prototyping and development of product. (they are also vendors for which they are paid on a PO by PO basis. Since the company has no offices, the ops manager and myself maintain offices in our homes and some slow moving inventory strogae in my garage. So the shareholders have agreed the both the ops manager and myself should be compensated in some way for the office expense. So if I read this right, you say we should get months rent checks for the approximate cost of the home office. In that way the cost and the income of the home office would cancel out. Other office expenses can be reimbursed directly through the expense reimbursement protocol of the business. I imagine the same would be with the company truck where it is owned and operated by the ops manager, but gauranteed and paid for by a car allowance agreed by corporate resolution.
If the "rent" gets reported on a 1099 that is fine, it still is not subject to self-employment tax and the income effect would be offset by the retal property cost each year.
