Expenses for Business Use of Your Home - Tax Forum - Tax Help Forum, Payroll Tax Forum, Business Tax Forum, Tax Questions, Free Tax Advice

aleung1649 · 02-18-2009, 07:16 PM

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I have a one man LLC, and am running it from my home office.
I am told by my CPA that if I file for 8829 Expenses for Business Use of Your Home, it is basically the same as my LLC renting the home office from myself. Therefore, I have to report rent as income from myself on schedule E, is that correct?

WebTaxOffice · 11-20-2009, 06:27 PM

Without saying much I will say please read these IRS guidelines on Business Use of Home.

http://www.irs.gov/taxtopics/tc509.html

It will answer all your questions.

Skyhawk · 11-22-2009, 08:13 PM

The LLC is a seperate legal entity, or legal "person" if you will. The LLC cannot deduct expenses for the use of your residence. The way to get this expense on the books of the LLC is to charge it rent. The other side of the transaction is to report the rent on your return. You and the LLC are considered related parties (entities or persons) and as such you cannot have losses, for tax purposes, in transactions between related parties. In short your CPA is right. Report the rent and expenses at fair rental value on a schedule E, and the deduction of the rent on the LLC return depending on what return venue is selected for the LLC (Corporation, S-corp., or schedule C). When you go to sell the residence there will be other tax issues.