NASSAUSUFFOLK

Good morning,

I am looking for commentary on the Section 280a Deduction - below is recap from an article my client sent to me.  Does anyone use this?  Do you send your minutes to the IRS with the corp return?

Thank you in advance for any feedback.

Peg McCoy

Key Takeaways: Section 280A Deduction Explained

• Section 280A(g) allows business owners to rent their home to their business for up to 14 days per year, making the rental income tax-free and allowing the business to write off the expense.
• To benefit from the Section 280A deduction, schedule legitimate business meetings at your home, ensuring they do not exceed 14 days and are not for entertainment purposes.
• Document the meetings by taking corporate minutes, and proactively submit them to the IRS to protect your deduction.
• Find comparables by researching local hospitality venue rates for similar meetings to ensure your rental pricing is reasonable and legitimate.
• Invoice your business for the rental, creating a clear paper trail for both your personal income and business expense.
• Pay the rental expense from your business account, keeping a record of the transaction to establish legitimacy.
• Document the income on your personal tax form and write it off on your business taxes, using Schedule C (Form 1040 or 1040-SR) or consulting with a tax advisor for other business entity types.
• Use common sense when determining rental expenses, basing them on legitimate comparisons and avoiding overcharging.
• Consider leveraging other properties you personally own, such as vacation homes or vacant properties, as long as they meet the IRS definition of a dwelling unit.
• Collaborate with a tax advisor familiar with both federal and local tax codes and your business to optimize your tax strategy and take advantage of the Section 280A deduction.

This article was just posted by Marcum this week:

IRS Gives Taxpayers a Mulligan on Improper Application of Master's Rule

Sheryl

Good morning,

I am looking for commentary on the Section 280a Deduction - below is recap from an article my client sent to me.  Does anyone use this?  Do you send your minutes to the IRS with the corp return?

Thank you in advance for any feedback.

Peg McCoy

Key Takeaways: Section 280A Deduction Explained

• Section 280A(g) allows business owners to rent their home to their business for up to 14 days per year, making the rental income tax-free and allowing the business to write off the expense.
• To benefit from the Section 280A deduction, schedule legitimate business meetings at your home, ensuring they do not exceed 14 days and are not for entertainment purposes.
• Document the meetings by taking corporate minutes, and proactively submit them to the IRS to protect your deduction.
• Find comparables by researching local hospitality venue rates for similar meetings to ensure your rental pricing is reasonable and legitimate.
• Invoice your business for the rental, creating a clear paper trail for both your personal income and business expense.
• Pay the rental expense from your business account, keeping a record of the transaction to establish legitimacy.
• Document the income on your personal tax form and write it off on your business taxes, using Schedule C (Form 1040 or 1040-SR) or consulting with a tax advisor for other business entity types.
• Use common sense when determining rental expenses, basing them on legitimate comparisons and avoiding overcharging.
• Consider leveraging other properties you personally own, such as vacation homes or vacant properties, as long as they meet the IRS definition of a dwelling unit.
• Collaborate with a tax advisor familiar with both federal and local tax codes and your business to optimize your tax strategy and take advantage of the Section 280A deduction.