Can I deduct a business mortage payment or only the interest and why?
I need to know if I can deduct the mortage payment on a business. Our business mortage is a commercial loan and only the business is on it. Or, is only the interest on the business deductable. If so, would it be in our best interest for the business to rent from us this year?
The business can only deduct interest expense. If you own the property personally, and the loan is in your personal name (OK if business is a co-borrower), then the business could deduct the entire payment as rent expense. However, you’d then have a separate schedule on your tax return for this commercial real estate. You’d show the rent payment as income, and then deduct the interest expense there. If the business is an S-Corp then shouldn’t be much of a difference either way. . .
If you’re a business owner with commercial real estate, you really should have a CPA (or experienced tax accountant) prepare your taxes. . . .
Oh, you can’t deduct the entire loan payment, as principal paid is a repayment of money lent to you!
July 1st, 2009 at 9:22 am
The business can only deduct interest expense. If you own the property personally, and the loan is in your personal name (OK if business is a co-borrower), then the business could deduct the entire payment as rent expense. However, you’d then have a separate schedule on your tax return for this commercial real estate. You’d show the rent payment as income, and then deduct the interest expense there. If the business is an S-Corp then shouldn’t be much of a difference either way. . .
If you’re a business owner with commercial real estate, you really should have a CPA (or experienced tax accountant) prepare your taxes. . . .
Oh, you can’t deduct the entire loan payment, as principal paid is a repayment of money lent to you!
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