USA DBA incorporated on Jan 1 Scorp

[SABBookkeeper]

One shareholder S corp incorporated on Jan 1 from Sched C. Personal Home and business property share physical lot. Trying to figure out how to handle the "Rent" issues. Mortgage, Internet, Phone, Water, Electricity, Internet and Septic Tank are all shared by both the shareholder home and the business. Before the DBA paid all expenses and were allocated for tax purposed with the business use of home percentage. Now that we can't use that, trying to decide which has the least tax implications. We have considered Utilities in leiu of rent, but I have concerns that these utilities are also used for personal home. If we estimate expenses and pay the shareholder a flat rent amount that includes everything will the Schedule E add too much additional income to their personal return? It was also suggested that the utilities be put in the corporations name and the personal use be a fringe benefit? Has anyone had any experience with this, or something that worked well for them? Appreciate the insight.

 

[Drmdcpa]

Wow you got some seriously wrong advice there; personal use I told = fringe.

Nothing really changes on the allocation of expenses. The business portion moves from 8829 to Schedule E. In addition a rent check needs to go from corp to property owner.

If you are unfamiliar with this, as it seems to be, you should get professional assistance. There are many issues including self rental and depreciation.