Rent to myself ? - Posted by Thomas

Posted by David Krulac on January 29, 2002 at 19:26:34:

there are IRS rules concerning self dealing, fair market rent,and arms lenghth transactions.

Rent to myself ? - Posted by Thomas

Posted by Thomas on January 29, 2002 at 18:51:45:

I know others have had this idea but can you rent a house from your own company and if so, why would I want to do that?
Is it profitable?

Actually… I was watching a gallager episode (comedian)
and it was one of his jokes… That he should rent from his own company…

Re: Rent to myself ? - Posted by Troy M

Posted by Troy M on January 30, 2002 at 07:36:03:

I don’t have a direct answer to your question, have to ask Gallager. I do the opposite, I rent office space in my home to my corp. I receive passive income w/out self-employ tax, and the corp writes it as an expense.

Troy M

Re: Rent to myself ? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on January 30, 2002 at 06:12:18:

Renting business property from an LLC to a C-corp to bail earnings out of the C is legit, assuming FMV rates as David and Brent point out. Renting a personal residence is generally not a good idea if you lose the personal gain exemption upon sale. I am curious to see if one could put the home into a SMLLC…the LLC is ignored for federal tax purposes, so the gain exemption would be preserved. The question is: is there sufficient state law business purpose to provide liability protection?

In certain cases, it would be financially beneficial to have your company own the property and then to live in it without paying rent- AND not having to report the rental value as income. This is covered by Code sections 119 and 132. Common example: Onsite apartment manager (you) is required by employer (your C-corp) to live on premises and be available at all hours…under such circumstances, the free apartment is excluded from your income. There is case law support for this position…though it has to reasonable, really the sort of thing that is custom. I do NOT think that an RE entrepreneur that works out of a single-family home could pull off the same thing…too hard a time justifying the corporation’s requirement to “be at home” in an arm’s length context.

John Hyre

David’s right. Must be arms length. NTXT - Posted by Brent_IL

Posted by Brent_IL on January 29, 2002 at 23:59:44:


Re: Rent to myself ? - Posted by Rob B

Posted by Rob B on January 29, 2002 at 22:03:23:

Be VERY careful, sounds like an Enron idea!