Alexia Constantaras, Attorney at Law, Montgomery & Andrews
Business owners can sometimes save money by buying the building where they’re housed. Rather than monthly payments going toward rent, mortgage payments build an asset the business can sell or use as loan collateral. Corporate business owners can buy property privately and rent it to the business, providing income for the owner and a deductible expense for the business. When the business owns the property, depreciation expense is maximized and the asset side of the balance sheet is strengthened. However the property is purchased, several aspects of the purchase agreement require review.