Article Date:
March 2008

Word Count:



Renting to Your Corporation Does Not Produce Passive Income

Gregory J. Farris of Gardiner, Maine, owned the building that he rented to his legal practice.


He made a profit on the rent and characterized the profit as coming from a passive activity, which he used to offset passive losses from other properties. The IRS disagreed with the passive income classification and asked Mr. Farris for additional taxes of $13,259; $17,251; and $17,482 for the three years before the court.


The court had a simple decision: if the income from ... Log in to view full article.

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