I tried to structure it every which was I could to make it a write off, but my accountant said the IRS is very familiar with exotics as business write offs and it's a no go. According to him, the only ones that can write them off legitimately are ones that the car is actually used in the business and another (normal) car would not suffice. For instance, an exotic car rental company, a fashion magazine doing lambo shoots, etc.

Supposedly, what I am allowed to write off is the sales tax, an auto write off (which in IL I think is $5k/yr), and ordinary use of the vehicle if used for business purposes.

This is just what he said, so if others have better info please chime in.

 

Perhaps this is different in New Zealand anyway? I'm sure there's no IRS -- perhaps something similar though.

 

We've done it by purchasing vehicles that were classified as "heavy trucks" (over 5000 or 6000# or something like that) by the US govt, and allowed to be expensed at 100% some years (when Bush2 gave incentives to small businesses and allowed up to 50K/100K in new equipment purchases).

Key was the vehicle had to be heavy, so we bought an Excursion (could have bought a Hummer H2 and expensed it, but didn't want to spend the money).

Own other vehicles outright (convertibles, etc) that I've paid cash for. All other expenses (insurance, gas, maintainance) are taken care of by corp-- IF YOU ONLY USE IF FOR BUSINESS PURPOSES. I keep a very accurate mileage log, and on some of my cars, every single time I get into the car and drive somewhere, it's for business (and I note the reason, and mileage of each and every occurance in my log).

If I wanted to expense an exotic, I'd have one of my corps buy it as an investment, and lease it to another one of my companies. LEASING, at least as I've been told, is very expensible (as opposed to owning). So I'd look into that.

But a HUGE disclaimer: While I wrote off the Excursion, and have some of my vehicles expenses covered by my businesses, I have NOT purchased or leased an exotic-- so don't take my word for this. Ask a great acct.

-Russ H.

 

I have to disagree with you on this one. A lease is a lease......if your business can justify the money being spent (by showing enough income) it does not matter. You do not have to disclose what your leasing. Maybe your accountant is being a bit coservative but mine is a stickler when it comes to stuff like that and as long as your not leasing anther vehicle within the company your writeing it off in, you should be fine. Now on the other hand I do also have a car dealers license with dealer plates, etc etc so maybe my accountant feels more comfortable because of that, but that company was set up strickly so I could get away with being able to get in and out of my cars quickly and not pay tax and regi on them. When I buy and sell the cars I take my loss and write off through that company but I'm using my own credit lines and cash combined to buy them.

 

See in Illinois a lease is treated exactly like a purchase. You pay all sales taxes up front and it's titled as lessor/lessee. Yeah he is on the conservative side. And yeah I'm sure your dealer license helps lol.

 

AZ leases are taxed as you go. So if you only pay 50k in payments on the car then thats what you pay in tax.

 

if it is sales tax you don't like... check out montana llc's. if you do a search for montana rv llc or something similar, some companies will show up. Won't work in every circumstance, but if it does work for you can save a bundle!

 

Not fair!! That's how every state should be :banana:

 

Florida is the same way.

 

Here is a pic of our old hummer that we did for one of our biz cars:



We wrote off 100% of it.

 

I don't want to hijack, so please move this if you feel I'm taking the original thread off course.

For those of you that advertise your business on vehicles, do you ever feel that the use of a higher-profile vehicle detracts from the image of your business? On one hand, using an attention-grabber (lets use a yellow GTS Viper as an example) definitely helps to get your business noticed by people while you're out and about. On the other hand, people may assume that your business is making too much money (charging too much) and turn them off.

To be more specific, my business is a C2B service that is directly related to automobiles. I don't advertise on any vehicles right now, but I have contemplated doing so in the future. I'd appreciate any feedback from people who have been down this road.

Thanks,
M