LLC-income from spouse, pmts to spouse...

[equinecpa]

I was just going through a clients records and found the following transactions between his spouse and his llc. He has a sole member llc and includes the business income on his personal return. There are the transactions I question:

a) Income received from his spouse (some of which was reimbursement for items he paid out in the course of his business, but some was also revenue)

b) Loan payment to his spouse: This loan was in place before they were married.

c) Rent to his spouse

My question: Is it OK to leave these transactions in his business schedule C? I'm deducting the interest on c but then including it on Schedule B. Same with the rent, it comes off on C goes on E.

The two keep their finances totally separate.

Thanks

Carolyn

[Gretel]

I was just going through a clients records and found the following transactions between his spouse and his llc. He has a sole member llc and includes the business income on his personal return. There are the transactions I question:

c) Rent to his spouse

My question: Is it OK to leave these transactions in his business schedule C? I'm deducting the interest on c but then including it on Schedule B. Same with the rent, it comes off on C goes on E.

The two keep their finances totally separate.

I try C. If property used indeed is titled to spouse only the rent agreement should be OK. We are not talking about OIH, are we?

[equinecpa]

Oih?

I can't figure out what OIH is...fill me in?

[Gretel]

Sorry. I once was in the same position. OIH=Office in Home