Renting your home office to your LLC/entity

[Nicole A.]

Hello BP!
I'm a little behind the curve on this, but my Enrolled Agent suggested that I rent my personal home office to my LLC. This way, similar to when I used to rent out extra bedrooms, I can write off a portion of things such as maintenance/repairs.

For those of you that do this, what do you charge your LLC? Something really cheap per month or full-market rent value? I was hoping/leaning towards cheap.

[Linda Weygant]

Originally posted by @Nicole A.:

Hello BP!
I'm a little behind the curve on this, but my Enrolled Agent suggested that I rent my personal home office to my LLC. This way, similar to when I used to rent out extra bedrooms, I can write off a portion of things such as maintenance/repairs.

For those of you that do this, what do you charge your LLC? Something really cheap per month or full-market rent value? I was hoping/leaning towards cheap.

If you are a single member LLC, then it's all on your personal tax return and you're better off utilizing form 8829 for your Home Office Deduction.

If you are a multi member LLC, then charging rent is much more inline with a proper tax strategy. The LLC pays you rent, which lowers LLC profit on your K-1. The LLC will then issue a 1099 to you for the rent it paid which you will then declare on Schedule E of your personal return along with the appropriate percentage of expenses.