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Rental expenses

Forum|Forum|5 years ago
June 10, 2020
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Can I also enter my rental expenses in my 1040 if I have entered them in my 1120s as a business owner? My business rents the property to myself and I include the advertising, maintenance, supplies, utilities, etc. in my taxes reflected on 1120s. Is it allowed to use these expenses again in my personal taxes?

Best answer by Anonymous_

The self-rental rule recharacterizes income from a rental activity as nonpassive income if the property is rented for use in a business activity in which the taxpayer materially participates (losses are still considered passive).

A

Anonymous

you can never deduct the same expenses twice. If the S-corp is paying you rent which it should if you own the property, it gets the deduction for the rent and other expenses it pays pursuant to the lease. There is a written lease isn't there? Then on your return, Form 1040 Schedule E, you pick up the rental income take a deduction for depreciation and other expenses you were responsible for under the lease. These could be mortgage interest, real estate taxes, repairs and maintenance,

if the S-Corp owns the property the only place that the expenses should be deducted is on the S-Corp. This would include depreciation and other expenses such as mortgage interest and real estate taxes

Carl11_2

Employee

@12309 I can somewhat see how your post "could" be confusing to someone who doesn't understand the intracacies of how a self-rental works. Your response while correct, needs further clarification.

The S-Corp will claim the rent paid as a rental expense of the S-Corp. That's it. End of Story. The S-Corp can not claim anything else related to this rental since the S-Corp does not own the rental.

On your personal 1040 return you will treat it exactly the same as if I personally was the one paying you rent. All rental income and all rental expenses will be claimed on SCH E of your personal 1040 tax return.

Remember, the S-Corp is a physically separate taxable entity, just like *I* am a physically separate taxable entity.

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Anonymous_Answer

Employee

The self-rental rule recharacterizes income from a rental activity as nonpassive income if the property is rented for use in a business activity in which the taxpayer materially participates (losses are still considered passive).