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If you are a less than 10% shareholder of the S Corp, you are allowed to use the per diem substantiation rules for both meals and incidental expenses and lodging.

If you are a greater than 10% shareholder, the disallowance of the per diem method through 09/30/2000 applies. After 10/01/2000, meals and incidentals are allowed, lodging still requires other substantive proof.

What constitutes other substantive proof can be quite a lengthy discussion. In short, it requires a diary (the reason for the business trip) and the receipt (to substantiate the amount of the cost). A diary noting the cost and an ample sample of receipts (as in, you stay 10 times at the same hotel, and you have 3 or 4 receipts) with the costs being relatively the same for all 10 times would also suffice.

Hope this helps.

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