USA Deductibility of rent for C-Corp housed in condo owned by an owner

[Susan Obermeier]

A small C Corporation with two shareholders have their office in an office condo that is owned by one of the shareholders and his wife. Small businesses cannot deduct rent when an owner of the business owns the real estate. Does this apply when the business is a C-Corp? If so, can the owner, instead of charging rent, pass through the HOA fees as "Office Services" since the occupants benefit from those services? In this particular case, the owner's business cannot afford to pay the rent at this time, so the owner does not have any income against which to apply the HOA fees.

 

[Drmdcpa]

Since when can't a small biz corporation deduct rental expense paid to one of the owners for use of their real estate? Not only can they but to keep things arms length they should.

The rental income on the personal return may need to be treated under the self rental rules.