Real quick, my wife owns a S Corp. I’m a minority stakeholder. We gross about $300k a year through it.
We have an RV that we used to use for family trips, but now only use it for the business. We use it when we head to shows and markets. Its an old classic RV, draws a lot of attention, and worth about $25k on comps. Its well over 9000#
Since we are only using it for business purpose, i’d like to depreciate the expense through the business, including ownership.
Can our business “pay” the owner (me), for the vehicle and offset that cost as a depreciating expense? We could always register the vehicle in the name of the business. The additional commercial insurance expense would be strongly offset by the tax reduction
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RV rental business sounds like a great idea. I knew a guy who rented boats for the day he made lots of money until people started crashing then after drinking all day.
Have you considered just renting it to your corp? Could be done indefinitely compared to a sale.
This is what I was going to say. You can treat it as a rental expense per event and charge basically whatever you want. I do this either a truck and trailer used for hauling race cars. Every weekend it goes out for the business the business pays me a rental expense.
Of course. You can buy an RV. You can be the seller. I think as long as you’re using some objective standard for valuation you won’t have any difficulty. As with any other purchase. I “sold” my flight school a simulator that I had purchased before forming the school.
This is a great question for your CPA
Have you been deducting the business use portion already? You can do that, even if the business doesn’t own it. Did you use the actual expenses method or the mileage rate?
Generally, a transfer of an asset by an owner who controls the Corp will be treated as a capital contribution and the Corp’s basis will be the owners basis in the asset. No gain/loss would be recognized on the transaction.
The transferors basis in their stock will increase.
Generally this is how I would approach the situation.
Yupp, this guy is either an accountant or does taxes.
U wanna do it as a contribution to ownership. So you don’t take a tax hit on ur personal income.
Ur S Corp basis will be ur basis. And if when it spits it back to you it’s at basis. You only take a tax hit if there is a gain when u sell it later.