Can I rent my 2nd home to myself for business purposes?

[Geoff Kraemer]

I am currently a w2 doctor with a house in town A. I am planning on moving to town B (90 miles away) and becoming a 1099 doctor (town B is now my primary residence). I will still likely be doing an outreach clinic in town A 1 or 2 days a week and I will need a place to stay overnight. I know there are pros/cons of Sole proprietor/LLC/S -Corp, but for the purpose of this question - Can I rent my now secondary residence in town A to myself?

[Eamonn McElroy]

For the purposes of this question, we need to know how things are organized.

If the rental is held directly, or through a Disregarded Entity (DE), and the healthcare business is organized as a sole proprietorship or DE, mechanically, what you're proposing won't work.  Both activities are dissolved into you, the owner, for federal income tax purposes, and one cannot rent from oneself.  Any formal arrangement and payments in this situation would just be you shifting money from one pocket to another, there isn't an income tax effect either way.

If you flip the healthcare business to a regarded entity, like an S Corp, it's very possible the arrangement will work as long as everything is done at an arms-length and fair market manner.