Level 2

S Corp ownership of personal residence.

Forum|Forum|5 years ago
October 15, 2020
2 replies
25 views

Taxpayer purchases home in a corporate name.

Corporation is an S corp.

S Corp pays all interest, real estate taxes, etc for the property.

How does the interest, real estate taxes get to the taxpayers return?

This topic has been closed for replies.

T

TaxGuyBill

Level 15

It doesn't?

There is no reason to put a personal residence into a corporation. And if it was done, it is not a business and I don't see why those should be passed on the to taxpayer.

But *IF* they are allowed, they would be passed through via the K-1. The corporation DID file a tax return, right? If not, there are high penalties for late filing.

I think the taxpayer needs to bring this mess to the crazy lawyer that talked him into this.

qbteachmt

Level 15

"How does the interest, real estate taxes get to the taxpayers return?"

Well, it seems your taxpayer, an employee of the corporation, has Taxable Fringe Benefit for the Fair Market Value of the employer-provided housing, which is supposed to run through Payroll. Then, it is part of the taxpayer's 1040, because it is part of the W2.

Isn't that what you are asking?

Don't yell at us; we're volunteers

N

neil11Author

Level 2

No! The taxpayer purchased the house in an S corp to protect it from creditor attacks. The real estate taxes and interest are being paid by the S corp. Would like them to be on the 1040. Save having the taxpayer make the payments directly, Is there any way this can be done?

NEIL ROTH

sjrcpa

Level 15

Since they are not business or investment expenses, they could be treated as nondedcutible expenses. Then maybe shareholder could deduct them.

Where does S Corp get money to pay the expenses?

Seems like an SMLLC would have been a better idea.

The more I know the more I don’t know.

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