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IRS Tax Map 2008
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taxmap/pubs/p334-030.htm#en_us_publink100025364

Rent Expense(p36)


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previous topic occurrence Rental Expenses next topic occurrence

Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as a business expense only if the rent is for property you use in your business. If you have or will receive equity in or title to the property, you cannot deduct the rent.
taxmap/pubs/p334-030.htm#en_us_publink100025365

Unreasonable rent.(p36)


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You cannot take a rental deduction for unreasonable rents. Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Rent is not unreasonable just because it is figured as a percentage of gross receipts.
Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. For a list of the other related persons, see section 267 of the Internal Revenue Code.
taxmap/pubs/p334-030.htm#en_us_publink100025366

Rent on your home.(p36)


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If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. You must meet the requirements for business use of your home. For more information, see Business Use of Your Home, later.
taxmap/pubs/p334-030.htm#en_us_publink100025367

Rent paid in advance.(p36)


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Generally, rent paid in your business is deductible in the year paid or accrued. If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. You can deduct the rest of your payment only over the period to which it applies.
taxmap/pubs/p334-030.htm#en_us_publink100025368

More information.(p36)


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For more information about rent, see chapter 3 in Publication 535.