Vehicle deduction

[cpabsd]

What would constitue a legitimate deduction for business vehicle? By this I mean when is it justified to transfer a personal vehicle to the company and deduct actual expenses there. I understand the actual versus standard deduction. My question related to when it is "necessary and ordinary" and what criteria is used to determine whether it should be business asset or personal vehicle with standard deduction taken. The business entitiy is an LLC if that matter.

[schirallicpa]

LLC is a state level designation. Is the business a proprietor, a partnership, or a corp?

Anyway - if its a proprietor, then he needs to make a determination as to business usage and go from there.

If it is a partnership, he can sell it to the partnership or make a capital contribution to the partnership. Then the partnership decides when and how he uses the vehicle for personal reasons. I have seen where a partnership makes a entry to draw for personal usage.

If it is a corp, then the corp can purchase the vehicle. (Don't forget to change registration with the state and insurance info.) Then personal usage - if beyond de minimus - would be considered a fringe benefit included on the users W-2.

The entity would make the decision as to what is ordinary or necessary as a normal business decision.

Sounds like maybe someone is trying to take a write-off that seems a little sketchy?

[Lion EA]

Whether the vehicle is owned by an individual or by a business entity, the ultimate deduction will be based on business usage. The ownership decision is often made on non-tax issues like the ease of obtaining insurance or financing.