1) Form 1099-MISC should be prepared on a cash basis, so should show $68,000, assuming the payments were paid by check and not a third-party payment method like Venmo or PayPal.

2) The accrual basis taxpayer cannot deduct an expense (e.g. accrued rent) payable to a related party until it is included in income by the related party. See IRC Section 267(a)(2).  A 67% shareholder is a related party, so if the shareholder is on the cash basis of reporting for tax, then the corporation cannot deduct the rent until it is paid.

3) Cash basis shareholder reports $68,000 as rent income.

4) The unpaid accrued rent of $34,000 should be reconciled on Sch M-1 on the corporation Form 1120 as an Expense Recorded on Books, Not Included on Return, which will increase the taxable income as compared to Net Income Per Books and will show on page 4 of Form 1120.