Business edition on Home rent for Scorp

[pk]

Prabalji, 

                  let us first be clear on a few things.  An S-Corp is an entity  separate from yourself.  Even though a single member S-Corp  kind of behaves like a pass through entity in some instances, it behaves like a C-Corp in other areas. Once you make that distinction that this is an entity that  is apart from yourself ( member/s ),  there is no such thing as home rent for the S-Corp.  If the S-Corp's main premises are  same as your home ( postal address), it still can only use dedicated exclusive  portion of those premises  as its own --- thus if the premises are rented, you must delineate/ allocate  a portion of the square footage that is used exclusively  (and all the time)  by the business -- the total rent / utilities etc. can be allocated to the S-Corp.  I have had clients with S-Corp ( single member) that  had machines running 24 X 7 and thus were able to claim the rent & utilities allocated to the business.  Just have good records  in case of audit --- this is an area of heightened attention by the IRS.

If you need more help on this -- please add in comments

[westry1]

Where is this deducted? I've seen multiple posts all say something different,  schedule A, schedule C or schedule E

[pk]

does your S-corp use a dedicated area in your home as its main office and only for S-Corp use?  Or are you talking about rental income   from properties that you own or the S-Corp owns. ?

[iwest]

 My S-corp uses a dedicated area in my home as its main office

[pk]

so you are talking about allocating a portion of rent  to the S-Corp, yes?  If that is so then you enter that as rental expense  on your S-Copr return and that will flow through to the K-1 and you then do the needful on your form 1040?  Does that answer  your question?  Feel free to add your questions in comments

[iwest]

So as an owner/employee of a S corp that uses part of the home for business, my expenses ie rent, utilities, furniture should be annotated in box 1 on the K1?

[pk]

These can be expenses ( but be careful to have records  including the reasoning that you used  ) on your S-Corp filing. --- I do not think it needs to be annotated on K-1 -- these are expenses  t run the  business  for the gross income.  Only the deducted  i.e. net income flows through the K-1  for the S-Corp owner/partner to pay taxes on.