Tax Law (Questions About Taxes)/Mother-in-law apartment

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Question
I have a mother-in-law apartment that I rent that comprises 25% of my total home square footage. I write the apartment off on my S-Corp form 8825. In regards to Mortgage interest and Real Estate Property tax, can I write off the total amounts on my 1040 if the rental is in part of my home? or would I divide the interest and tax totals by the % of total home square footage and deduct this amount on the Rental Form 8825 and then be able to deduct the remaining on Schedule A of the 1040? I am confused if I can write off the amounts on my 1040 Schedule A because of some verbiage I read that it can't be written off if the dwelling is used as a home as well. I would really appreciate some clarification as to what of these amounts is deductible and on which forms?

Thank you for your assistance. Dawn

Answer
Dawn,

Thanks for your question.

You state that the home is taken as a deduction on your S corp return.  You can only do this if the house is titled in the name of the S corp.  If it is, you cannot deduct anything related to it on your 1040.  

It is either a corporate activity or a personal activity.  If you mingle the two, the IRS (and others) may disregard the corporate entitly.

It is either a corporate property, in which case you report in on the 1120S and  show as income to you the fair rental value of you using the property for personal use.  Or it is a personal use property, in which the entire activity is reported on your 1040.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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