I have a corporation that holds some investment property; does the rental income from my investment property have to be collected in the accounts of that corporation? Can I have that income collected in my personal account? If not is there an alternative way I can collect my rent without it going in the corporate bank accounts?|||Assuming you own 100% of the stock in the corporation you can deposit rent receipts to your personal bank account.
There are two "gotchas" to consider.
First, unless you are an S-Corp the rent receipts should be recorded on the corporate books as Accounts Receivable and Income at the time they are due. If you are not an S-Corp and don't make the appropriate entries in the corporate books you will find that the IRS will take action against you and you will be subject to interest and penalties and may even become a guest of Uncle Sam for an unacceptably long length of time. Since the IRS likes to "cross the ts and dot the is" even if you have an S-Corp this may not fly unless you keep your books on a cash basis and make the entries in the corporate books -- but at least you can defend your actions since the rent receipts would count as personal income.
Second, if you do this and the corporation is in debt and goes bankrupt you will be leaving yourself open to both a civil suit and criminal fraud charges, which could leave you both poorer and a guest of the state for an unacceptable long length of time.
It goes without saying that if the corporation has any other stockholders (other than someone who shares your personal account -- like a spouse) what you propose is an absolute no no and could lead to serious legal difficulties.
Hope this helps
Jerry-the-bookkeeper
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