see this thread about s-corp home-office
note that if you decide on having the s-corp pay you rent (option 2 in the thread) you have to report the income as rent and take depreciation on schedule E. Then when you sell the depreciation has to be recaptured as section 1250 income. The home sale exclusion does not apply to the recapture.
https://accountants.intuit.com/articles/home-office-deductions-expenses/
under option 3 - accountable plan as another thread suggests you can be reimbursed for depreciation but then it's like option 2 when you sell
An allocated portion of depreciation for the house should(?)
also be included in the reimbursed amount. When the house is sold, the “allowed or allowable” portion of the home office depreciation expense will be recaptured as ordinary income, so clients may as well receive a benefit now.
https://accountants.intuit.com/taxprocenter/tax-law-and-news/how-your-s-corporation-clients-can-use-...
the question mark is mine
note that a cash basis s-corp takes the deduction in the year it pays the rent or reimburses the employee
