For 1, I don't know if he has other property, if he is grouping activities, if he has passive or non-passive income/expense other than this rent, other units in that same building, etc. You will want to get up to speed on the matrix that applies to this person.

For 2, since this person is an employee to their S Corp, so there is no Home Office provision for them (a W2 person can take that as deductible expense in certain States, but not Fed). That's when an accountable plan would be used. And when you are reimbursed for something, you would reduce your reportable expense by the amount you already got repaid.

Google:

s corp home office deduction accountable plan

Only read after-TCJA articles, such as:

https://www.journalofaccountancy.com/issues/2020/may/deduct-home-office-expenses-coronavirus-remote-...

https://molentax.com/wp-content/uploads/2022/08/Home-Office-with-Corp.pdf