We use a room in our house that we own as an office. The corporation pays us 1000 each month as rent. Do we have to claim the rental income and file a schedule E on our tax return? Or do we just claim the rent expense on our corporate return and call it a day.
Thank you.
You should talk to your CPA. But depending on how you're structured, if you're writing it off as an expense on the business side, then you will most likely have to declare it as income on the personal side.
You will need to claim the income on your return unless there is a tax provision that says you don't have to claim the income (doubtful). Expenses associated with the rental can be taken as well.
You have to report it as income. AND it is a very grey area with an S Corp and office in your own home. [addsig]
Also.... In most states you also are required to pay sales tax from the tenant to the landlord, who is required to forward the tax to the State.
In Florida, there is now a sales tax loophole, if anyone is interested.
[addsig]