Home Office Questions

Technical topics regarding tax preparation.
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Northern MI and Coastal SC
I was reading a series of articles and came across some information I had not previously noticed. I have one client that maintains two offices (one is home office), but it is a bit of an odd structure.

Home Office - Entity A, corporation reimburses shareholder
Physical office - Lease is under Entity B, but Entity A owns 49% of Entity B, and 51% is owned by Entity C. Entity C is a limited partner located two states away.

I realize under Soliman case, the home office tests would fail for this set of circumstances. BUT, I see where current IRS and IRC language ended up being modified after Soliman case to include using home office exclusively for and as principal place of performing administrative and management functions in order to qualify it as a home office, and the home office does not have to be revenue generating to produce a home office deduction. Driving between two offices also typically entitles you to auto expense deductions, instead of it simply being non-deductible commuting.

For my client's situation, which is as outlined above, Entity B is a partnership that flows into two entities--Entity A and Entity C. Entities A and B are my clients. If Entity A used the home office as its principal place of conducting administrative and management functions, but it is the physical office leased by Entity B that actually generates revenue, does Entity A's ownership in Entity B give rise to dual office treatment? If so, this should allow a deduction for auto expenses or mileage between the two offices. Entity A only produces income through its ownership of Entity B, and Entity A performs the admin and management functions for Entity B.

Curious of thoughts, and if anyone has looked into this. I have not read all of the case law or IRC referenced by the articles, but this unique situation made me wonder if I should even bother researching it, or if two legally separate entities, but one being 49% owned by the same entity that has the home office, could give rise to additional benefits and remove the commuting factor.
 

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