Answers · Deductions, assets & depreciation
Can a Business Deduct Rent?
Rent for property used in business is generally deductible under IRC §162(a)(3), subject to related-party and capitalization rules.
How it works
The rule, and what it turns on.
Security deposits, prepaid rent, related-party timing and disguised purchases require separate treatment.
Example
$8,000 monthly facility rent under a genuine lease is generally current business expense.
Common mistakes
What we see go wrong, and what we do instead.
- Deducting refundable security deposit.
A better approach
- Separate leasehold improvements from rent.
Authority
Where this comes from, so you can check it.
IRC §§162(a)(3), 267.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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