Last month, I wrote an important article that explained how renting an office to your business can create a trap that crushes tax deductions.
The solution to the problem that I outlined involved having your business own the building. This certainly solves the tax deduction problem but it opens up the building and your business to additional legal exposure.
Is there a solution to this dilemma? You bet there is and I explain it in my new article titled Tax Tips: Buy the Building, Rent It to Your Business, Avoid the Self-Rental Trap, and Create Legal Protection with Tax-Deduction Shelter.
Three ways our fact-filled article can help you:
- We’ll tell you how to pass the “appropriate-economic-unit” test. When you can claim 100% control and ownership of both the business and the rental, you’re in good shape. But in order to qualify for a fat deduction, you’ll have to pass the “appropriate-economic-unit test.” What is this test and how can you pass it? You’ll find out when you read the full article.
- Harvey and Wilma will make everything clear. You’ll meet Harvey and Wilma Johnston who are married and file a joint tax return. Harvey owns an S corporation that operates his dental practice. Wilma owns an S corporation that owns a building which she rents to Harvey’s dental practice. They handle the taxes the right way and come out winners. You’ll learn how you can come out a winner when you read the full article.
- We’ll tell you how to win an important election. If you qualify to group your self-rental with your business, you need to make a formal election as specified by the IRS. When should you file the election disclosure statement? You’ll find out when you read the full article.