Self Rental

Corp A is an S corporation which leases its building from LLC B

A single individual owns both S CORP A and LLC B.

Corp A has signed a triple net lease and deducts all taxes/maintenance etc.
Corp A was to do leasehold improvements to the tune of 500k and take a bonus.

Want to see if there are any rules on self rental which does not allow this?

Leasee or lessor may take the improvements deduction depending on who pays. 179 maybe be better than the reduced bonus.
If also making a 1.469-4(d) grouping election(Rev Proc 2010-13) to make any losses non passive then must be done in first year.

Corp A is a high profit making entity and that is the reason they are trying to use this method to writee off againgst the profits.