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Internal Revenue CODE IRC Section 280a(g)
By Jonathan Gillardi of Section280a.com
How IRS Section 280A Works The Code: In the normal course of business, companies rent out meeting facilities to hold Principal/Director/Board Meetings: Board/Director Meetings for Corporations, and Principal Meetings for Partenerships and Limited Liability Companies. In most major cities, the cost of renting a meeting room for 6 to 8 principals (with audio/visual equipment and catering for 2 meals is about $1,000 per day). In the IRS tax code, a company can choose to rent out “a home” instead of a “meeting facility”. Instead of paying the hotel (or conference facility), the company pays the homeowner to rent his home. The homeowner does not claim this “rental income” as income—as this is a special, non-taxable rental income. The homeowner does not claim the rental fee as income but as a special tax-free rent. The IRS puts a limit on the number of days a company can rent a home, 14 days per year…twelve monthly Principal/Director/Board Meetings, one Semi-Annual meeting, and one Annual meeting. The Play: Now the tax play…in this scenario, you the business owner rent the home from you the homeowner at $1,000 per day 14 days per year. $14,000 per year is spent by you the business owner and written off as Rental Expense, while this same $14,000 is written to you the homeowner as non-taxable Rental Income. That’s $14,000 of non-taxable money. End Result…With $14,000 of non-taxable money you get to keep more of the money from your business profits in your pocket instead of sending them to Uncle Sam. For a Network Marketer, through this tax write-off, the government could be subsidizing your auto-ship. In fact, the government is literally subsidizing anything you do with this money. The Catch: There are four catches to this system: You have to make the money in order to write it off. However, this system works on any profit level. If you are making $100 a month in your business, rent out your home to your business for $100 per month. The Rental fee a homeowner can charge must be fair and reasonable, and “relative” to company income. If you made only $100 this month in profits you couldn’t rent your home for $1,000. Also, rental price needs to be fair and comparable to a local hotel facility, Craig Wyoming business owners probably can’t reasonably rent their home for $3,000 a day. Your business entity must have principals, directors, or board members. This means your business entity will need to be something more than a sole-proprietorship, such as an LLC, S-Corp, or C-Corp. We recommend an LLC as they are usually the cheapest and easiest to setup. Check with your state’s government webpages for information on creating the entity. The average cost to setup an LLC is about $150. For smaller companies, principals can be added as non-owning, non-paid, and non-voting principals to act simply as advisors. You must always have on file the necessary tax forms to substantiate the write-off in order to defend an audit. This is where Section280A.com has made it simple. We help you automatically fill out the right forms each month with the right information so if there is ever an audit you have the proof for your write-offs.
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Contributor's Note
I am not a CPA, Account or Tax Lawyer, so please get professional advice before acting on any of my suggestions.
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BySpecialInvitationOnly.com
| BySpecialInvitationOnly.com
| CoachOfTheMonth.com
| http://ipodiums.com/jgillardi
| http://blog.roomformeetings.com
| http://coachofthemonth.com/blog
| http://www.fuellegacy.com/networkpro2
| http://blog.dirhambank.com/
| http://blog.platinumtycoon.com/
| http://jongillardi.com
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