Sch C - rental expense to self

[oceanlovin'ea]

Business use of home

Why doesn't he take his expenses on business use of home form? That is the way a sole proprietor usually deducts his office expenses.

Linda

[Bees Knees]

Why doesn't he take his expenses on business use of home form? That is the way a sole proprietor usually deducts his office expenses.

Linda

Only if the building is the taxpayer's personal residence. The original post made it sound as though we are talking about a commercial building.

[Ken]

rent

You cannot rent anything from your self. At least where I come from a sole proprietor and his spouse filing a joint return are both equally responsible for the tax return and the schedule C.

[Bees Knees]

IRS Pub 535:


"Rent is any amount you pay for the use of
property you do not own. In general, you can
deduct rent as an expense only if the rent is for
property you use in your trade or business. If you
have or will receive equity in or title to the prop-
erty, the rent is not deductible."

That should settle the issue. You cannot rent something you own to yourself and deduct the rent.

[lsmith]

Rental to Self-Schedule C

I would say that you cannot do this. I look at it being almost the same as putting yourself on payroll on the schedule C. You can't do that either.

[Black Bart]

Wait! Wait!

IRS Pub 535:

"Rent is any amount you pay for the use of
property you do not own. That should settle the issue.

Although I fully agree with your conclusion, I must protest. To quote (or paraphrase) Armando -- "The IRS publications are not the law or the regulations." As an advocate of strict compliance with rules, I must insist on an official revenue regulation.

[Bees Knees]

To quote (or paraphrase) Armando -- "The IRS publications are not the law or the regulations."

Actually, that is not necessarily true. Congress has given the IRS authority to interpret and administer the rules. They can do this by publishing rulings, which the courts do consider. Published rules can include IRS Publications and instructions to forms, even though these would be at the bottom of the food chain.

In reality, the IRS Pubs DO have authority in the absence of contradicting authority. In other words, if you can't find an example in the code or regs or court cases or other rulings to contradict something written in the Pubs, the IRS Pubs are the rule.

So I will thow it back into your court. Provide a citation to contradict the statement made in IRS Pub 535 concerning the deductibility of rent.

[Black Bart]

Armando---Mayday, Mayday, Sos!!!!

So I will thow it back into your court. Provide a citation to contradict the statement made in IRS Pub 535 concerning the deductibility of rent.

I can't. I use the Pubs myself--have no idea where to go look up a revenue ruling, etc.

ARMANDO---HELP!!!!

Back to the movies again--seen that one where Butch tells Sundance "I've got to go get the ammo. You can cover me--I can't cover you."? This is just such a situation--sic 'im!