A doctor’s C corporation that paid his home mortgage cannot deduct the cost, according to the Tax Court.
A company may deduct payments made to lease home office space from an employee or shareholder, if they’re ordinary and necessary business expenses.
Here, the doctor used one floor of his home as a medical office, and his corporation took a rental deduction for the mortgage payments it made on behalf of the doctor. But there wasn’t a lease agreement or anything else to support a rental arrangement.
So the firm’s write-off was disallowed.
Christopher Ng M.D., Inc., TC Memo. 2018-14