Benjamin Yazersky CPA wrote:
- quote -

City B used to be residence and tax home. City A in a
different state is now residence and we want it to be tax
home.

I'm still trying to understand whether or not there is a
difference if the professional corporation rents the
apartment and garage or if he rents it. I am concerned that
if he rents it and only uses it for 10 days, he can only
expense 10/30th of the rent even though the actual monthly
cost is less than a hotel and a car rental.

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"A.G. Kalman" <glendale202-mtmtax[at]yahoo.com> wrote:

- quote -


If everything is handled in an arms length transaction, it
should be ok.

2 ques...

1. If city B is in a different state, are you creating
residency or nexus issues?
2. Could you be changing the tax home of the individual?

--
<<< Benjamin Yazersky CPA [NJ & NY] > > ---> real address on hobokenx or hobokeni <---

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

A one person corporation is headquartered in City A. The
executive/employee travels to City B for business and stays
overnight anywhere from 10 to 11 days per month. City B is a
high cost city (federal per diem rate is $168) and actual
cost of hotel, meals and incidentals is running $300 per
day. The cost of renting an auto for the 10 - 11 days is
another $350 to $400 month. The corporation reimburses the
employee under an accountable plan for the actual cost of
hotels, meals, incidentals and car rental. Currently, this
is averaging out to $3525 per month.

Executive determines that the out of pocket cost can be
reduced by 1. Renting an apartment in City B on a one year
lease ($2000 per month). 2. Not eating every meal out but by
buying food and preparing some meals himself. 3. Driving one
of the cars he already owns to City B, renting a parking
garage ($100 month) and leaving that car in City B for
business use.

The apartment would remain empty and unused for the rest of
the month. The car would be left in the garage and not used
on days he was not in City B.

What is he allowed to be reimbursed under an accountable
plan without the payment being considered compensation?
Does it matter whether he personally leases the apartment
and parking garage or whether the corporation leases it?
What if he has to personally guarantee any corporate lease?

Where I need help is on whether the whole rental cost of the
apartment and garage can be reimbursed to him if he holds
the lease and not be treated as compensation even though he
only uses the apartment for 10 to 11 days. It seems to me
that if the corporation rented the apartment and garage and
it was only used for business, that the whole cost would be
deductible by the corporation.

Can he submit for expense reimbursement the actual cost of
food he buys and prepares himself? I would think that this
would be no different then buying already prepared food.

The standard mileage rate would be used for reimbursing
actual business miles incurred on the car when used in City
B. As cost of parking is not in the standard mileage rate,
can he get reimbursed for the monthly cost of the garage if
he is paying the monthly rent?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >