Question

My CPA tells me that IRC Section 280A allows me to rent my entire home to my S corporation for 14 days or less during the year and get big tax deductions.

In the example, he explained that I could charge my S corporation $1,500 for each day of use. This rate equals what I would have to pay to rent a home that’s pretty much like mine. Say I rent the home for 14 days. That gives the S corporation a $21,000 tax deduction for the year.

He next explained that on the personal side of the ledger I don’t get any tax deductions for the rental of the house, and I also don’t include the rental income on my personal tax return.

Because I operate as an S corporation, this strategy creates a net $21,000 tax deduction when passed through to me.

This seems almost too good to be true.

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