Vehicle Purchase

[LanaDallas]

A client is purchasing a new car under personal name for business use and company will pay for it. What is the best way to go about that? Would section 179 and bonus depreciation apply in this situation?

[sjrcpa]

What type of legal entity is the "company"?

[LanaDallas]

LLC, S-corp

[abctax55]

Why not have the entity buy the vehicle?

Will it be 100% business use?

Type of vehicle will impact depreciation calculations as well.

[IRonMaN]

New approach to last week's question?

Solved: Vehicle Purchase - Intuit Accountants Community

[abctax55]

Good catch, Jeff.

[qbteachmt · Accepted solution]

Let's translate this:

"A client is purchasing a new car under personal name for business use"

Is a "POV" = personally owned vehicle, then.

"and company will pay for it."

Nope.

"What is the best way to go about that?"

The company pays this person wages through payroll. The company can accept a business mileage report under the terms of An Accountable Plan and reimburse per the IRS mileage rate and this is not taxable to the shareholder-employee.

"Would section 179 and bonus depreciation apply in this situation?"

No. The Company doesn't own this vehicle. You stated that clearly.