User talk:Greg91020
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Rent
Yours: "The owners of a building rent said building to a corp they own 100%. There is $190k actual rent income, and it is reported on 1040 Schedule E. There are no expenses on the Sched E; they were all paid by the tenant, which is their 100% owned C Corp. The C corp operates a light manufacturing business and pays market rent. Their rental agreement also specifies the corp pays all expenses like repairs and the property taxes. My "friend" says if the corp is audited, all those expenses will be disallowed. I disagree. Is there any guidance you know of on this issue?"
Well, gee, I wonder what that accountant is basing that on? A triple net lease is pretty common, where the tenant pays all the expenses. Might do a search on the definition of a triple net, but if there's a lease agreement in place that defines what the tenant pays...it'd be beyond amazing to think that it would be challenged unless the total paid was way out of line for rents in the area.
Well, backing up, there would still always be mortgage interest and depreciation at a minimum. You show the rental income and the mortgage interest at least. JR1Jeff
Rent 2
Yeah, it's odd, but it's also ok! It's what it should look like after a lot of years...duh. I wouldn't worry one bit. Weird what folks get excited about. . .and you never know if it's from experience in an audit or just the red flag myth book. JR1
Rent 3
No, sec. 721 controls, and the old basis rolls over into the LLC as if nothing happened. So nothing new does........ JR1
Credit cards and corp.
Greg, this is done all the time! Including by me...I usually tell a client to take one card and use it for biz, and keep others for personal. They're usually not ever in the corp name. But they're corp cards. Do split off any personal expenses, naturally. Jeff
