Can the Owner of a commercial building pass the expense of improvements to the building over to his (he is the only share holder) S-Corporation that is located in the same building? Then take a depreciation of the improvements by calling the improvements “Leasehold Improvements” on the Corporations Book? If so does this violate IRS's definition of "Related Persons", as it pertains to “Qualified leasehold improvement property” where it states,” Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. However, a lease between related persons is not treated as a lease”. Now, if he cannot do this, how/what would be the proper way for building improvements to be reported?