JohnMurphy <JohnMurphy1234[at]gmail.com> wrote:

- quote -

There is often at least one advantage to paying rent to yourself in a
case like this. Most income you receive for working for your
corporation is subject to self employment tax. Rent payments by the
corporation to you generally are not.

- quote -

Unfortunately I don't know the answer to your question. Normally you
can't pay in one year and deduct it in another. One of those here who
actually prepares returns will be along soon to give you a better
answer.

Stu

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- quote -

Hi Stu and everone: I am the OP..

Yes, Stu, what you wrote above is all correct. I do keep the S-Corp
business (that occupies 1 office) separate from the owner ship of the
building (owned by me as an individual). And I do have separate bank
accounts.

My Schedule E is almost done. Soon, I'll take all my documentation to
a CPA to be completed for my 2007 Corp Income Tax. ...(and my 2008
record-keeping is in very good shape now...)

But, as I said in my last post, I was hoping to think of an
intelligent question. I am trying to catch up and get on track.
(note: I intend to be fully compliant with the IRS and have intention
of avoiding any taxes).

I do have an important question, but I'm afraid it may not be a very
intelligent one <grin> ....it has to do with payments by the Corp for
the individual account (me as the owner) for rental cost of the
office.

I moved in in Jan 2007, but have never made any rental payments by the
Corp to myself as the building owner.

For the 2007 Tax Year, should I write a check from the Corp to me, for
the full FRV for the entire annual rental cost? I realize that the
expense would be incurred in 2008. Can I deduct it for my 2007
taxes? Am I too late?

I do realize this is now nearly the end of 2008. Can I still do that
for 2007, and claim it as an expense on my 2007 taxes?

Thank you in advance.

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SD <Don.Steiger[at]gmail.com> wrote:

- quote -

In OP's case the business is owned by his wholly owned corporation, and
the building is owned by him personally. In that case he needs to have
separate bank accounts, and make actual rent payments. This is true
not only for tax purposes, but for other legal purposes in case he ever
wants to get the legal benefits of having a corporation in the first
place.

As to non-incorporated businesses, it's a good idea to keep them
separate, too. But it often won't make any difference if you do or not
from a tax standpoint.

Stu

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On Nov 24, 5:05*pm, Harlan Lunsford <luns...[at]bellsouth.net> wrote:
- quote -

Let's say you treat the building and the business as two separate
entities. The business pays rent to the building. Does the building
and the business have to have separate bank accounts, with rent money
being physically transfered, or can the rent simply be an accounting
entry. If money is physically transfered to the building, can the
building loan it back to the business without interest?

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On Nov 24, 7:05*pm, Harlan Lunsford <luns...[at]bellsouth.net> wrote:
- quote -

Thanks to all who have replied. I read your replies soon after the
thread got going, and it gave me a LOT to do.
I was hoping to reply with some "intelligent follow-up questions", but
I don't have any yet. So, rather than let too much more time go by,
I'd justlike to express my gratitude for all who took the time to
respond.

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D. Stussy wrote:
- quote -

cases with which we come in contact. But commercial property FRV is so
much harder to determine unless we know the facts, so you're right on
that point.

if it's retail space and adaptable to any number of business uses, it's
easier to assess FRV. However with a building with four service bays
and lift equipment installed with oil pits, you get the picture. The
1,000$ per month my S corporation client pays himself as owner is very
clearly defined as FRV, since there's no other demand in town for that
type of building. Naturally I was thinking about him.

Also I would add that FRV might be influenced by the corporations'
ability to pay, given marginally profitable operations in business
conditions like we have today. A lower monthly rental could easily be
justified as FRV today than a year ago. Again, F & C!

ChEAr$,
Harlan Lunsford, EA n LA

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:ANmWk.40261$_Y1.20749[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

So, I considered something that you didn't think of. The reason I have to
justify any comment that constitutes free advice is what? Don't worry - I
"turn the lights out" on the IRS too.


========================================= MODERATOR'S COMMENT:
OK -- enough sniping. You each got your shot in. Tax related
messages only, please.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"D. Stussy" <spam[at]bde-arc.ampr.org> wrote in message
news:ggcjqn$d2o$3[at]snarked.org...
- quote -

Interesting that you kept us in the dark as to your thinking.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Harlan Lunsford" <lunstax[at]bellsouth.net> wrote in message
news:JDeWk.6587$Lv6.1179[at]bignews8.bellsouth.net...
- quote -

But until we know that the Scorp's rent is at FRV, we can't say that it's a
transaction for profit, and therefore cannot rule out Schedule A treatment
(per IRC 183). That's (one reason) why I left the Schedule A treatment
possibility open. Two entities controlled by the same person make them
related and thus profit motive is always suspect.

--
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D. Stussy wrote:
- quote -

corporation has a written lease from you, the landlord, to the
corporation and a fair market value is paid.

The answer to which I'm responding doesn't apply as to the 1/4 because
this is not a home office situation. That's the case when an S
corporation rents a portion of one's home.

ChEAr$,
Harlan Lunsford, EA n LA

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Ralph" <daytonohio10[at]sbcglobal.net> wrote in message
news:7f00a6c9-c69f-4439-8c53-26261cc2e1d7[at]g38g2000yqn.googlegroups.com...
- quote -

Yes. Schedule E (for at least the 3/4 that you rent). As for the 1/4th to
your S-Corp, treatment may vary according to the details - Schedule E or
Schedule A.

- quote -

Same as above.

- quote -

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I bought a commercial office building that contains 4 small offices.
I occupy one office for my business, and rent 3. I have a loan for
the building, and am making monthly payments.

The purchse of the building is separate from my business; I bought it
in my own individual name. My business is a small corp. Aslo, the
operartion and maintenance of the building is completely separate from
my business.

1. Interest: Can the interest on the loan for the building be
deductible?

2. Other Expenses: Can expenes for maintenance of the building be
deductible?

Are there any possible tax advantages that you can suggest or
recommend?

Thanks.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >