324
 
New Member

Rental or business expense?

10/9/09 2:57 PM
Total Views: 89

I bought a house near my firm for business purposes only and have used it as such. I am now renting it to a manager at the firm at a reduced rent so she would accept a job at the firm. Is this a business expense or a simple rental.

 
 
Subscribe RSS
 
 
All Replies:  Answers (2)  
Host
 
Rating 0

Answer

10/12/09 12:05 PM

 Hopefully a CPA will chime in on this, but I'll take a stab at it.  Is any of this in writing?  Sounds to me like rent subsidy is part of the employment package, so I'm thinking the reduction is a business expense.  The next question I would be asking is the rent reduction taxable to her?  

Keep in mind, I could be out in left field on this.  Can somebody else chime in here?

Deni

 
 
 
Accountant Community AllStar
 
Rating 0

Answer

10/15/09 8:03 AM

 I think you're on the right track, Dennis.

There's an exclusion from income (meaning it wouldn't go on the employee's W-2, but would be deductible on the business return) for on-premises lodging furnished for the convenience of the employer.  You haven't provided enough information to know whether your situation has any hope of qualifying.

If it doesn't qualify, the reduction in rent below FMV is wages to your employee, and income to the rental activity (which I believe would be a rental activity).

Hey, we get sig files now! Cool - I wonder what I'll put here? Ah, I know: RTFM.
 
 
 
 
 
Subscribe RSS
© 2009 Intuit, Inc. All rights reserved. Intuit and QuickBooks are registered trademarks of Intuit, Inc.
Terms and conditions, features, support, pricing and service options subject to change without notice.