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I have a client who is a business operating as a sole proprietor and filing Sch C to file their business income. The client is planning on buying a used EV and the dealer asked him if he wants the purchase in his or business name. It will be 100% used by the foreman for business purposes only and I explained that in order to have this as an asset of the business and depreciate the vehicle, it must be in the name of the business. The EV credit is available to businesses as well as individuals but is an EV credit only allowed to individuals with regards to previously owned vehicles? This may be the only reason the car dealer is asking the business owner this question? I have not dealt with EV credits for any of my clients so not sure if the credit on previously owned vehicles is only available to individuals and not businesses? What I read is the purchase price cannot exceed $25K, does this threshold still apply for purchases in 2025?
Feedback welcome.
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"it must be in the name of the business."
A sole proprietor is their own business. The business is not a separate entity.
"in order to have this as an asset of the business and depreciate the vehicle"
A Sole Proprietorship can use mileage allowance as expense or actuals.
What your taxpayer does is track the business use = keep a log. They also should have adequate insurance coverage for the employee to be driving this vehicle. It's technically still a private vehicle. It's not a specialty vehicle. The employee is taxed through payroll on any personal use, by the way.
As for if that specific model and year qualifies, the price limits, etc, you can look it up at the IRS. Don't take the salesman's word for anything.
Don't yell at us; we're volunteers
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Thanks for the feedback response and I know that in order for the vehicle to be a business asset and depreciable it needs to be in the name of the business. That is clear to me. What I was trying to ask is the EV Credit different for an individual than for a business? Presuming the vehicle qualifies a used or preowned vehicle can not exceed $25K purchase price to qualify for the credit if it is individually owned. A business does not appear to be able to obtain EV credit on used/preowned vehicles. That may be the reason the salesman is asking. I have read the IRS guidelines on EV credits and I think what I have stated is correct. Does this sound correct?
