Deduction: May be superior to home-office deduction?
I learned of this deduction at a real estate training. It may be common knowledge to you all, but I mentioned it to my accountant and she had never heard of it. Let me know what you think!
Rather than using the "home-office" deduction that is less than stellar and can throw a red flag to the IRS (no personal experience, just hearsay), an alternative is the following:
Rent out your entire primary residence to your L.L.C. for 1 FULL DAY every month for the year. Your L.L.C. will use the residence for conducting a monthly meeting to discuss potential deals, run numbers, etc. The amount you rent your home to your L.L.C. will be determined by calling 3 local hotels and inquiring the price to rent a conference room with catered meals.
The reason it works is because your L.L.C. can deduct the expense of the rental of your home 1 day every month, but you personally don't have to claim the rental income because you are not renting your home for more than 14 days of the year.
Anyone tried this or have any light to shed on it?