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orlycpa
Level 2

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

My corporation (I own majority) owns a building, in which I rent from as an individual, for my side business. Can I deduct this on my Schedule C?

 

Section 162 says if you have equity you cannot. I'm confused.

 

Thank you.

6 Replies
Critter
Level 15

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

You can deduct it on your Sch C  IF  the corporation  reports the rental income on it's return.    

tagteam
Level 15

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?


@orlycpa wrote:

Section 162 says if you have equity you cannot. I'm confused.


You do not have equity in the building, the corporation does. If you had equity in the building individually, you would essentially be renting to yourself. 

orlycpa
Level 2

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

Thank you so much! So does anything change if I am paying above market rent? 

orlycpa
Level 2

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

Ah - gotcha. So even though I'm a majority shareholder in the corporation that I'm renting from? 

tagteam
Level 15

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

Yes, because the corporation is a separate entity for federal income tax, and other, purposes.

Critter
Level 15

My corporation rents an office to me, for my side business, is this rent deductible on my Schedule C?

Careful about renting above FMV  as the IRS could consider this a tax avoidance scheme by moving income from the Sch C subject to SE taxes to a corporate return which may not.  

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