SCorp - Office Reimbursement

[oceanlovin'ea]

Single owner S Corp reimburses shareholder for use of space used by business. Due to damage to well from Hurricane Jeanne in 2004, in 2005 client hooked up to county water system which costs $1419. After the hookup, she had a leak in her plumbing in bathroom (probably due to increased water pressure) and had to have pipes replaced in house for a cost of $3200.
Is any of that reimburseable? I know on Business use of home, it would probably be depreciated. No depreciation here. So what happens?

Thanks.

Linda F

[Bees Knees]

You have to first determine if it is a repair or an improvement. If it is a repair, then the business use percentage of the cost of repairs should be reimbursable. If it is an improvement, the cost is depreciated over 39 years. Probably not worth trying to reimburse.

[OldJack]

The real question here is how does this have anything to do with being a business deduction that could be reimbursed by the S-corp. It all sounds like personal nondeductible expense to me. Hooking up to new water line is personal. Leak appears to have damaged personal real estate and new pipes are to a personal residence.

[oceanlovin'ea]

Office of corp

The office of the scorp is located in the home. So the corporation is allowed to reimburse the officer for a percentage of expenses to maintain the office. Her customers regularly make use of her bathroom facilities - on a daily basis.

I just wasn't sure what classification those expenses would come under - repairs or improvements.

Linda F