Reimbursement from S corp to Employees

[vgbs]

Hi,

I have 2 questions about my S Corp which does have an accountable plan and I take reimbursement for a home office deduction.

  1. My S Corp has a corporate vehicle (large cargo van) that gets parked in my personal driveway (street parking is not allowed for commercial vehicles).   Can I get reimbursed somehow as it takes up 2 spots and then my husband or I have to park in the street?  Local industrial parking would probably cost around $250/month.

  2. We also have a large shed on our property and a large shed on a rental property that we own that is used to house tools and supplies for the S Corp.  Is this also somehow reimbursable?

Thanks!!

[tagteam]

I will page Champ @Rick19744 for your questions. Stay tuned.

[Rick19744 · Accepted solution]

A few comments:

• Your facts are limited as they don't provide any detail on what type of business is involved, whether there is another business location being used, etc.
• I suppose, depending on the facts, you might be able to charge your S corporation to use the driveway and shed.
• But the issue is would this be reasonable given the facts of your situation?
• The IRS could possibly take the position that you are not really out economically by having to park your personal vehicles on the street.
• The IRS would ask why are the tools and supplies being stored in the shed.  Is this a reasonable place for these items?  Is there another business location that could be used (relates to bullet #1)?
• If your home is your business and you don't have any other location, requesting reimbursement for an expense that you aren't incurring would certainly be a question upon an audit.  You would need to be able to support the reimbursement as reasonable and also provide support of how you arrived at the expense reimbursement amount.
• Would this be out of line, possibly not given the right facts.  Just keep in mind your risk tolerance if audited.  Being audited is not the end of the world, just be prepared to support your position.

[vgbs]

Thanks for the information and for taking the time to answer my questions.  

This is a small commercial construction company and all the tools, supplies and the van are necessary to run the business.  There is no other place of business.  We are currently in the process of looking for industrial space but it's $2500-$3000 at a minimum. We are not sure, yet we want to do that after Covid and just clawing back to being profitable.

[vgbs]

Thank you!

[Rick19744]

You are welcome