USA Can I use my Corp to pay partial rent on a home business?

[Akriti Srivastava]

Hello,

I have a Daycare, which is filed as an S-Corp in California. It's a home day care so for about 50 hours a week, 90% of our apartment space is utilized by the day care. I was advised that since we are a corporation, I have to right a lease agreement between myself and the corporation for the time the daycare is open and collect a check; however, that amount will show as an income towards me when I file taxes. My question is, for the specific amount that is due for the hours of operations can I just pay my landlord directly from the corporation (and pay the balance separately, and yes the landlord is ok with this), or is that not allowed?



Thanks!

 

[smallbushelp]

Instead of asking in a forum like this, I suggest you consult a qualified tax accountant in your area to be sure. But from my limited experience, since the main lease is in your name, the corporation would be sub-leasing from you so it should pay you and then you pay the landlord. Yes, you will have to report the income but it may then also allow you to deduct some expenses that you would otherwise not be able to.