I had a great conversation with one of my fellow tax professionals about the rental of a personal home for 14 days or less to the corporation for its business meetings.
I explained the basic rules of the road as to how the deduction works, and my fellow professional said that he thought this strategy was too aggressive.
To give context to this, here’s a basic result from this strategy: John rents his home to his corporation for 14 days of corporate meetings. The fair rental value of the home is $1,400 a day for a total deduction of $19,600 for the corporation.
John receives the $19,600 tax-free because he rented his personal residence for 14 days or less during the year.
My fellow tax professional and I examined the law together, and he agreed that the law allows both this deduction to the corporation and tax-free receipt by the homeowner. But he still thinks it’s too aggressive. Frankly, it’s a great strategy, but my fellow professional simply doesn’t like it, and in his mind, it’s too aggressive.
That’s his opinion, and that’s how he will practice this strategy with his clients. (You do know that we all practice. I have a tax practice. My friend has a tax and accounting practice. My doctor has a medical practice.) I’m bringing this up because we all practice differently but with our client’s or patient’s care foremost in mind.
In my opinion, if a strategy comes directly from the tax law, it’s about impossible to be too aggressive. It’s simply a matter of law.
I think the 14-days-or-less rental of your personal home to the corporation is a great strategy that comes directly from the law, and I’d like to discuss how this strategy can work to your benefit.