qbteachmt
Level 15

"he used the business credit from the INC to purchase the vehicle used solely the LLC"

I am assuming the "Inc" means S Corp. You need to always state the Entity type.

Who is on the Title of the vehicle? Who is on the Loan document: John Doe, President of S Corp? John Doe, personally? Both (loan officer should know to make him sign as both)?

If the S Corp owns the vehicle:

The person using the S Corp vehicle at all is going to be charged through Payroll for Personal use as taxable fringe benefit (there are mileage rates and/or lease rates that would be used for that valuation). What they do with it otherwise is between them and the Insurance agent.

If the S Corp is on the Debt:

The LLC would be paying all operating costs and loan against a vehicle it doesn't own and against debt it isn't liable for. Do you have some sort of note between the person getting the use of the car from the S Corp and the LLC, like a lease or rental agreement?

If the Debt is personal, then if the LLC is a disregarded entity for this same one person: that makes the debt interest business and the Operating costs are Actuals, but they still don't own the car, and you still need to determine the arrangement between the S Corp and the LLC from the perspective of, perhaps, wrap-around loan payments.

Like this:

S corp is co-signer, but John Doe owns everything personally?

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