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BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience:  Owner of a CPA firm
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I an a single member LLC and my questions revolve around purchasing

Resolved Question:

I an a single member LLC and my questions revolve around purchasing a vehicle and should I put it in my name or in the LLC name if the company is paying for the vehicle. Which is better for tax purposes. If the LLC purchases the vehicles does the amount of purchase pass to my 1040 if I put the vehicles in my name. Also, what about the insurance - who pays for it, how do I label the vehicle use (personal or company)?
Submitted: 6 years ago.
Category: Tax
Expert:  BK-CPA replied 6 years ago.

I would put it in your name if you are going to be using it for personal reasons at all... To be honest, it really doesn't matter that much for tax purposes what you do here, unless you have a corporate election in place, given a single member LLC. Schedule C taxpayers get to claim the mileage at around 50 cents a mile or actual costs with actual costs being allocated to business use of the car (ie, not personal).

Customer: replied 6 years ago.
You indicated that I should put the vehicle in my name, but you didn't answer that if I do that wouldn't the cost of the vehicle pass directly to my 1040 as income since the LLC is purchasing the vehicle? And wouldn't the LLC get a better write off being able to expense the amount of the vehicle versus me using the standard mileage deduction for business use? The last thing you didn't answer was relating to the insurance - who pays for it and how to classify the vehicle use? Personal or business. Your reply is appreciated.
Expert:  BK-CPA replied 6 years ago.

No. (not income... you file on a 1040, and not an 1120S, correct?)

 

No. (you can take mileage or actual expenses if filing on Schedule C of a 1040)

 

It doesn't matter who pays for the insurance.

 

You're just complicating this to the hilt, actually...

 

Thanks again.

Customer: replied 6 years ago.

Relating to the company purchasing the vehicle, I thought that if they bought it for me (in my name), then this would be considered a "guarenteed payment" against the profits of the LLC and it would in fact pass through to me to report on my 1040 as income?

And I am not trying to complicate matters, I just need correct answers to help me.

And if the LLC purchased the insurance, wouldn't they write off the amount as an expense and I couldn't do that? Thanks.

Expert:  BK-CPA replied 6 years ago.

An LLC is not a regarded entity for tax purposes, but a disregarded entity. The IRS could care less if you have an LLC, save for trying to collect on payroll taxes in the LLC name and not yours, or if you use it to elect corporate status, etc.

 

Your expenses, for a sole proprietorship, which is all an LLC is to the IRS without a partner (then it's a partnership), are going to get deducted the same ol' way regardless...

 

Let this sink in (trying to prove a point): "IT DOESN'T MATTER!" Relax.

BK-CPA and other Tax Specialists are ready to help you