S-Corp business owner with $11k form 8829 home office deduction from previous Schedule C - what happens now?

The home office deduction works differently with an S-Corp versus a Schedule C. When you operated as a sole proprietor, you could directly claim the home office deduction on Form 8829 with your Schedule C. With an S-Corp, you have two options: First, your S-Corp can reimburse you for the business use of your home through an "accountable plan." This is a formal arrangement where your corporation reimburses you for legitimate business expenses. The reimbursement is deductible to the S-Corp and not taxable income to you. Alternatively, you can rent your home office to your S-Corp with a formal rental agreement. The rent is deductible to the S-Corp and rental income to you, but you can offset this with your direct expenses on Schedule E. Regarding the $11k of accumulated depreciation - that stays with the property regardless of your business structure. It will be relevant when you sell your home, as it reduces your basis in the property by that amount, potentially increasing your taxable gain.

After struggling with the same home office transition from Schedule C to S-Corp, I found a tool that completely simplified everything. I was trying to figure out what happened to my accumulated depreciation and how the accountable plan should work, and kept getting contradictory advice. I used https://taxr.ai to upload my previous tax returns and my current documents, and it analyzed everything and explained exactly what happened to my home office deduction after the switch. The tool even created a custom report explaining my options with the accountable plan versus rental agreement approach and how the previous depreciation would affect my future home sale. Their transcription technology automatically pulled all the relevant numbers from my old Schedule C and Form 8829, then showed me how to properly handle the transition. It saved me hours of research and probably an expensive visit to a specialist tax accountant.

Just wanted to follow up about my experience with taxr.ai since I was the skeptic earlier. I decided to try it out because I got a surprise bill from my CPA for asking "too many questions" about my S-corp's home office situation. The tool was surprisingly thorough! It explained exactly what happened to my accumulated Form 8829 depreciation and showed me how to properly document an accountable plan for my S-corp. The best part was that it created custom templates and a compliance checklist that I could just hand to my bookkeeper. The analysis of how my previous Schedule C deductions would affect my future home sale tax situation was super clear with actual numbers. I'm honestly impressed - it actually understood the complexities of transitioning between business entities and gave me actionable advice about my specific situation. Just wanted to share since it genuinely helped me understand what was happening with my accumulated depreciation.

I had the same home office depreciation question when I switched to an S-Corp and spent WEEKS trying to get answers from the IRS. Called over and over but couldn't get through. After 18 attempts over 3 days, I was ready to give up. Then I found this service called Claimyr (https://claimyr.com) that actually got me connected to a real IRS agent who specialized in business entity transitions. It was amazing - within 30 minutes I was talking to someone who explained exactly how the home office depreciation carries forward. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that the accumulated depreciation stays with the property but also explained some lesser-known options about how to handle the transition period between entities. Saved me thousands in potential mistakes. They've apparently helped connect over 175,000 people with the IRS when they couldn't get through on their own.

I need to eat my words and apologize to Profile 16. After my super skeptical comment yesterday, I was still desperate about my own S-corp home office depreciation question, so I figured what the hell and tried Claimyr. I WAS ACTUALLY TALKING TO AN IRS TAX SPECIALIST IN 45 MINUTES!! I'm still in shock. The agent pulled up my returns from both before and after my S-corp formation and walked me through exactly how to handle the accumulated depreciation from Form 8829. She explained that the $14k I had accumulated in home office depreciation remains associated with the property regardless of business structure changes. She also pointed me to a specific section in Publication 587 that addresses business structure transitions that my CPA had missed completely. For anyone dealing with complicated S-corp transitions like this, being able to get official clarification directly from the IRS is invaluable. Sorry again for being such a doubter.

Here's what I did with my S-Corp for home office: I set up a rental agreement where my S-Corp pays me $800/month to rent my home office space. I report this as rental income on Schedule E, but then I deduct all the expenses related to that space - utilities, internet, cleaning, repairs, insurance, plus depreciation on that portion of the home. My accountant said this approach is better than the accountable plan for my situation because I can still claim depreciation on my personal return. The rental income and expenses mostly offset each other, but I still show a small profit to avoid raising red flags about a consistent rental loss. For your old $11k from Schedule C years, that's already "used up" as far as current deductions, but it does affect your basis when you sell. Make sure you keep those old returns!

Has anyone actually gotten audited over the transition from Schedule C to S-Corp with home office deductions? I'm in the same situation, had about $9k of accumulated Form 8829 depreciation, then formed an S-Corp last year. My tax guy says not to worry, but I keep hearing horror stories about S-Corp audits.