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Can a client purchase a vehicle under his S Corp as an asset?

Client has a Youtube and social media channels dedicated to cars. All running under the umbrella of an S Corp and this is the primary income. He creates car content videos. (think reviews, test drives, social media entertainment). He plans to buy a car in 2024 which will be used primarily to create content about it. The content will generate revenue but it's unclear how much is directly related to that particular asset. Should he buy the car under the S Corp as an asset? Are there any red flags for the IRS? Are there any advantages? This is a car that costs around $120K.

5 Comments 5
Level 15

"Are there any red flags for the IRS?"

Well the fact that it costs over $100,000 might be a flag.  Technically a vehicle could be purchased through the corporation but then the personal use would be added back to his W-2.  The good news about this post is the fact that the car is $200,000 cheaper than what someone wanted to write off last week.

Slava Ukraini!
Level 15

What's he going to do with it after he test drives and reviews it?

Level 15

Ordinary & necessary?

Why oh why an S-corp?  And watch out for putting that personal use on the W-2 (there IS a W-2, right?)

Has school started up again?

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( Generic Comment )"

He is planning on keeping it for at least 3 years. For recurring content use. It is a custom made car and the client's main source of income is blogging and advertising cars. Ordinary and necessary? It is mostly an extra way of creating content for the purposes of making income. Since blogging and content creation is new to IRS, I was wondering if anyone has experience with these type of clients.

0 Cheers
Level 15

Old wine in new bottles.  Could a 1950s actor write off his Corvette because the publicity created whenever he was seen driving it, helped to promote his movies?  I tell clients with corporations to ask their insurance agent first, how title affects premiums.  But I think the next question here is, how is he financing it?  Or is he paying cash?  Employees can't deduct car loan interest, for another few years.