Article Date:
May 2009

Word Count:



S Corporation Setup Destroys Tax Savings



My CPA has my S corporation pay all my personal home expenses. Then, using Quickbooks, he writes off 22 percent for my home office and treats the remaining 78 percent as a distribution to me as the sole shareholder.


At the end of the year, my CPA has the S corporation deduct the 22 percent as rent paid to me for use of my home as an office location. He then includes that 22 percent on my Form 1040 Schedule E as rental income. What do you think of this arrangement? (T.F., Morgan Hill, Calif.)




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