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Subject:  Re: Some S-Corp Questions Date:  12/20/2000  2:52 PM
Author:  Helter Number:  43172 of 127753

I said: I've been told here and read in IRS publications that related parties CANNOT user per diems for business travel. Since you own your S-Corp - you can't use the per diems - its actuals only for you.

Here's a quote:
Who can use the standard meal allowance. You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. You cannot use the standard meal allowance if you are related to your employer as defined next.

Related to employer. You are related to your employer if:

1. Your employer is your brother or sister, half brother or half sister, spouse, ancestor, or lineal descendant
2. Your employer is a corporation in which you own, directly or indirectly, more than 10% in value of the outstanding stock, or
3. Certain relationships (such as grantor, fiduciary, or beneficiary) exist between you, a trust, and your employer.

As owner of your S-Corp - you are in category #2.

This is from publication 463.

Any tax heavyweights want to weigh in?

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