Does It Work?
I am an enrolled agent and a subscriber to your publication, along with several of my clients.
I question your article Tax-Free Income from Rental of Home to C or S Corporation that appeared in last month’s issue. I don’t think renting the home to the S corporation for 14 days or less is a viable tax-deduction strategy for the following reasons:
IRS Technical Assistance Memorandum 200121070 grants no rent deductions to the employee who rents to his or her employer. This negates your strategy.
This is a related-party transaction and therefore disallowed.
This cannot be used with a vacation home.
This is super aggressive and cannot be put on a tax return.
The $1,500 rent for a day cannot represent fair-market-value rent.
The rules of attribution will negate this transaction. ... Log in to view full article.