building home office addition

I am building an addition to our house. It will be used exclusively as my wife's S-Corp office space.
Total construction cost will be $30,000.
Can I take e.g. 60 month construction loan at apr. $500/month and
have her Corp. pay me $500/month rent fee ?
She would have business expense deduction and I would have ( hopefully) zero additional tax liability because my additional income would equal my expense .
Would it make a difference if I rent out this space as "myself LLC" ?
If the option described above is not going to work, what is my best other option ?
Thank you
John
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It may or may not equal out. You don't get to deduct your monthly construction loan payment in full.
What you'll have, is rental income, off-set by the loan interest, some percentage of taxes, insurance, utilities, and depreciation on the $30K addition over 30 years.

You can't create a loss to yourself.
Self-rentals like this have run up a number of court cases in tax or district courts.
Consult with a local CPA or attorney about the potential problems that loom ahead for you.
--
Paul A. Thomas, CPA
Athens, Georgia
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Paul,
Thank you very much for the feedback.
In other words it looks like the scenario I described would be no different than my wife just doing the typical home office deduction with 30 years deprecation for renovation cost ?
- John
wrote:

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