Last month you learned that you can rent your personal residence to your S corporation (or your C corporation or partnership) for 14 days or less and achieve the following double benefit:
1.
Your S corporation deducts the rent it paid you and then flows that tax deduction to you on the K-1 tax form.
2.
You receive the rental income from your corporation tax-free.
Example. Fred rents his home to his S corporation for 14 days during 2026. His corporation deducts the $35,000 in fair market rent that it paid (more on the fair rent later). The deduction flows through to Fred’s personal 1040 tax return via the S corporation K-1 to Fred.
Benefit 1. Fred has a $35,000 tax deduction.
Benefit 2. Fred has no taxable income from the rent the corporation paid.
Yes, we know this sounds too good to be true—but it is true, as we explained in How the Augusta Rule Turns Home Rental into Tax-Free Income.
In this current article, explore real-world questions and answers on how the rental of the personal residence to the S corporation works. ... Log in to view full article.
