I have a S-Corp client that currently rents outside space for offsite company meetings and business events. Can a S-Corp rent space from a shareholder under the Augusta rule and have the rental income paid from the corporation to the shareholder be nontaxable if for less than 14 days? If the corporation pays the shareholder more than $600 for rent, a Form 1099 would be required. Would the shareholder report this as other income and then back out the amount as nontaxable rental income?
Sorry, I wasn’t clear. The offsite meetings and business events would take place at the shareholder’s home. Instead of paying a third-party, the corporation would pay the shareholder for the use of their home for the meeting or event.