Has anyone ever dealt with a small C-Corp that pays for housing separate from the salary? How did you handle it and any advice or guidance on how to do it right and keep it above board.
Prepare a 1099-DIV or 1099-MISC for the recipient the corporation is paying for. Those payments should be a Form 1120, Schedule M2 reconciliation adjustment.
Thanks BIG E, question does your answer change if they have been using IRC §119 in prior years for the housing payments to owner-employees. Sorry I should have been more clear in my original question.
Does the C corp own the house? If NO, then Code Sec 119 doesn't apply. Does the C corp owner have a signed contract that specifies his compensation package to include lodging as a condition of employment?
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