My son owns many cars and has a large detached shop at his home for his auto interest. It has a service bay with auto lift and all the tools. He has started a Mobile Auto/Truck Diagnostics and Repair business. A multimember LLC with an Accountable Plan, Operating Agreement, meeting notes to document etc. He uses ¼ of the detached shop to park business vehicle and store business parts and supplies.
Occasionally they have to bring the vehicle to the shop to complete repairs that cannot be done in the field. If it requires the service bay and lift can he rent the use of it to the LLC as an expense? He’d charge less than the normal and customary daily/weekly rate in the area. This would be a rent expense for the business and nontaxable income to him as the business owner – correct? How would it be treated on the business books and his tax return? Larry.