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April 15, 2023
Question

Company Vehicle bought Personally..

  • April 15, 2023
  • 1 reply
  • 0 views

I bought a new delivery truck for my C-Corp. It is only used for business and the business makes all the payments. The truck is in my wife's and my names. What is the best way to stop this from affecting our D-to-I ratio when we apply for a mortgage, car loan, etc? We may file as an S-Corp if that makes any difference. My wife and I own 100% of the business.

1 reply

April 16, 2023

The only way would be a title transfer to the Corp.  this can have some non income tax consequences especially since it seems you financed the purchase and the holder of the debt probably has a due on sale clause in the financing agreement. most likely title transfer would be deemed a sale making the entire balance due immediately. from a tax standpoint you should have a written expense reimbursement policy among you, your wife and the corporation.  without it, the IRS could if audited,  since the loan I assume is in your names and therefore treat those payments as dividends to you. there may be no tax effect for this but if you are deducting the payments as a corporate expense or depreciating the vehicle the IRS could disallow the deduction.