Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.
If this $225K vehicle is a high-end car like a Bentley or some other personal vehicle, consider purchasing it personally.
If you had such a vehicle in your business-name and were audited by the IRS
, the IRS likely would fairly conclude that your business use of such a vehicle would not qualify for a deduction
since it is not either "ordinary or necessary" to have such a high-end vehicle for business. It would be too much luxury, unless you are in the business of selling such vehicles as your ordinary course of business.
Again, assuming this is some ultra-luxury vehicle, you could still have your company reimburse you for your pure business-related expenses of the vehicle, such as using the standard mileage
method on an accountable plan. This would make the business's share of the costs the same as if you used a more common less-expensive vehicle.
Regardless of the type of vehicle you use, if it is used less than 50% of the time for business, if purchased in the business's name you would have a few likely effects:
1) Personal use of the vehicle may be taxable to you as owner's compensation
Ad valorem (personal property
) tax would be assessed on the full vehicle value by your local government
You also risk the fact that you may be construed as mixing personal and business assets
and using the business as a "personal piggy bank" to fund your luxury purchases. This could lead to an involuntary loss of (piercing of) the corporate veil for protection of your business related assets.