Question: Should my corporation own our business building or should I own it personally?
Answer: If your business is incorporated, it is often a good idea to personally own the real estate occupied by your corporation.
If appreciated real estate is sold by a regular corporation, the gain will be subject to double taxation if the corporation distributes the money to you. However, if you own the real estate personally, there is no double taxation. Though the double taxation does not apply to S corporations, there can be problems when an S corporation sells its operating business and its real estate.
If you personally own the property, you can lease it to the corporation.
There are nontax advantages of personal ownership of business real estate as well. Discuss the facts with us and your attorney before you buy business real estate or change the form of ownership on real estate you already have.
Question: I own rental property. What expenses are deductible?
Answer: Expenses you incur to keep the property in good working order are deductible in the year you pay them. Examples of current expenses are painting, cleaning, repairs to fixtures, and the replacement of faulty items. Major outlays such as a new roof or construction of a patio or garage add value to the property and must be depreciated over a number of years.