Renting farm property to S -corporation

[equinecpa]

I have a client that has a horse arena they constructed for personal use.

They are now going to start hosting events in the arena. They will be running these events through their s-corporation. I have suggested the s-crop rent the facility on a per use basis. Does rent have to be FMV ?

Then for the Schedule E, would they depreciate the property based on # of days used? It is not a dwelling.

Thanks

Carolyn

[ChEAr$]

Rental income should always be based on FRV.
nuff said.

As for depreciating the "arena", remember, basis is always cost OR fair market value, whichever is less. I'm thinking maybe if they paid $17,000 for construction,
it may only have a fair market value of much less than that, if it's on their own property and not readily salable separately.

[equinecpa]

I wish these arenas only cost about $17,000...covered arenas usually cost in the hundreds of thousands...

[ChEAr$]

I wish these arenas only cost about $17,000...covered arenas usually cost in the hundreds of thousands...

Hah! looks like I know more about auditing that equine pursuits. (grin