s corp shareholder uses home office

[nkustura]

I have a client who is a sole shareholder in S-corp. Can he deduct his use of home office as the office for s-corp? If yes, would these expenses (utilities, insurance, depreciation of home) be deduced on 1120S or on form 2106 with his 1040 return?

Thanks in advance for all the help.
nk

[ChEAr$]

I have a client who is a sole shareholder in S-corp. Can he deduct his use of home office as the office for s-corp? If yes, would these expenses (utilities, insurance, depreciation of home) be deduced on 1120S or on form 2106 with his 1040 return?

Thanks in advance for all the help.
nk

Shareholders get no deduction for anything like a home office. I'm a shareholder in several large corporations, but I have no need of an office just because of that.

Now if this same fellow is an employee of this corporation, the corporation should have put into place an accountable plan whereby it reimburses him for certain expenses (see TaxBook (tm) for details. BUT. the plan must be in place, preferably written.

This is the way I do it since I'm CEO, president, sec/treasurer and general manager of my own 100% owned S corporation.

Alternately the corporation can require him to maintain an office in home for which it does not reimburse him. In this case, as an employee, his office in home expenses go to schedule a. And you know what that means. (grin) (2% haircut)

[nkustura]

If there is a plan in place and s-corp reimburses him for the certain expenses, will the reimbursement be taxable income on his 1040 return?

[Gretel]

No, it won't if a valid accountable plan is in place. It also requires a corporate resolution to adopt the plan.

[nkustura]

Thank you so much for your help. I really appreciate it.

[AZ-Tax]

What about this scenario?

S- Corp Day Trucker (home each evening) rents a garage exclusively used for repairing, maintaining and garaging the truck. Sits on a 3 acres of land along with the owners/operators residential house. Can the rent for the garage & utilities be an S-Corp business related deduction if paid by the S-Corp directly to the landlord and direclty to the utility company?

[Gretel]

S- Corp Day Trucker (home each evening) rents a garage exclusively used for repairing, maintaining and garaging the truck. Sits on a 3 acres of land along with the owners/operators residential house. Can the rent for the garage & utilities be an S-Corp business related deduction if paid by the S-Corp directly to the landlord and direclty to the utility company?

I don't see why not. A separate structure for OIH does not fall under the limitations of a OIH in your living quarters.