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Old 04-19-2014, 06:16 PM
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C Corporation Home Office Addition

I am starting a business out of my home - a C Corporation. I plan on using an accountable plan to account for the home office expenses etc. However, I'm first planning an extension of the home to build the home office. Can that be capitalized on the C Corporation tax return or are the expenses recognized over time through the accountable plan and I have to pay it as a personal expense? Also, if computers and furniture are purchased for the business, can it be capitalized and depreciated over time even though its in the home office. I'm basically trying to understand if 1) can a C corporation own a home office on their books and 2) can assets for the business maintained in the home office also go on the C Corporation books or does this all go through the accountable plan?



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Old 04-19-2014, 09:04 PM
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Originally Posted by johnshil View Post
I am starting a business out of my home - a C Corporation. I plan on using an accountable plan to account for the home office expenses etc. However, I'm first planning an extension of the home to build the home office. Can that be capitalized on the C Corporation tax return or are the expenses recognized over time through the accountable plan and I have to pay it as a personal expense? Also, if computers and furniture are purchased for the business, can it be capitalized and depreciated over time even though its in the home office. I'm basically trying to understand if 1) can a C corporation own a home office on their books and 2) can assets for the business maintained in the home office also go on the C Corporation books or does this all go through the accountable plan?
I am starting a business out of my home - a C Corporation. I plan on using an accountable plan to account for the home office expenses etc. However, I'm first planning an extension of the home to build the home office. Can that be capitalized on the C Corporation tax return or are the expenses recognized over time through the accountable plan and I have to pay it as a personal expense? =================>>>>>>>>>>For the Corp, you, SH and owner, establishes an accountable reimbursement plan and requires you, the EE, to provide your own office exp. You, as an EE, provide an accounting of home office costs to
Th eowner/sh and the owner/sh reimburses those costs.
the employee reports nothing and the corp deducts the
expense on 1120. You, the EE, can always take the deduction
for business use of home subject to the 2% of AGI limiton Sc A of 1040. The corporation can pay you for the costs of a home office under an “accountable” plan for employee business expense reimbursement. This optionbeing reimbursed under an accountable plan, provides the greatest tax savings. It is an excellent way to get money out of your closely-held corporation tax-free. The corp can deduct the amount of the reimbursement and you do not have to report the payment as income.

Also, if computers and furniture are purchased for the business, can it be capitalized and depreciated over time even though its in the home office.===============>>>>>>>>>>> under the IRS' rules, you're only supposed to write off the cost of purchasing your computer equipment and related expenses if they're only for business use. In general, you are allowed to write off only a portion of the cost of equipment used for both office and personal purposes.you need to depreciate them thru their useful lives.

I'm basically trying to understand if 1) can a C corporation own a home office on their books=============>>>>>>>>as
your business is in the form of a C-Corp, the C-Corp can pay you a fair market rent for the use of the space as C-Corporation Rent. This is a deduction for the corporation...but ALSO income for you on your personal tax return. You may off-set this rent by a pro-rata portion of the regular home expenses. Aslongas You should consider instead having the corporation pay you for your actual out of pocket home office expenses under an accountable plan, so that you would not have to report this as rental income.
and 2) can assets for the business maintained in the home office also go on the C Corporation books or does this all go through the accountable plan?==============>>>>>>>>>>I do not think so it belongs to the EE, Not in the C copr’s books UNLESS the biz is in the form of SP/SMLLC.



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