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QUESTION DETAIL
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A sole owner of an S Corporation based in Texas, rents a large house, and occupies two rooms for exclusive use for their business. They are consultants and they work extensively from there Can they sign a lease between the S Corporation and the shareholder?
ANSWER
The BIDaWIZ Team's Answer:
Yes, an S Corp shareholder/employee can charge rent to the S Corp as per IRC Section 280A(c)(3). There should be a floor plan in place to reflect the exclusive nature of the rooms used for business. In addition, the rent should be at fair market value.
