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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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How do I transfer ownership of my personal vehicle to my s

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How do I transfer ownership of my personal vehicle to my s-corp?
Thanks for choosing! I will do my best to provide you with a clear and concise answer to your tax question based on the information that you have provided.

First, I would recommend that you should only transfer the vehicle if the vehicle will be used 100% for business (By 100% business, I mean the car is parked at your place of business (not your home) and only driven for business errands). If the vehicle is used for business and personal use, you would be better served to keep track of business miles and have your S-Corp reimburse you for those business miles under a accountable plan. By reimbursing mileage under an accountable plan (in which you give the corporation a mileage report every month from which the corporation reimburses you the IRS standard mileage rate for the mileage on your mileage report) the corporation can deduct your auto expenses and you get reimbursed for those expenses without having to report the reimbursement on your personal return. Having the corp reimburse you under an accountable plan is the cleanest way to handle your auto expenses for tax purposes.

If you are going to make the transfer, you should be able to do so by going to the Minnesota DMV and changing the title from your name to your S-Corp.

If there are additional questions or concerns, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between OK and Excellent so that I may receive credit for my work. Thanks for my business.
Customer: replied 3 years ago.

we do use the vehicle for 100% business but our office is at home. will that still work?


we want the business to own the vehicle so the payments do not show up on our personal balance sheet for mortgage qualification. is there a better way to do this?

When you have a home business the IRS will try and claim that all your mileage from the home to business sites are personal commuting mileage. This issue is usually debated quite heavily in IRS audits and in my experience the IRS usually accepts mileage for home businesses if their mileage from home isn't to regular worksites.

For example, if you are a contractor and your daily mileage is consistently from home to various construction sites, the mileage to construction sites would be considered personal commuting mileage. Conversely, if you do most of your work at home and only drive from home for various business errands and meetings, the mileage from home would be more likely to be considered business.

Unfortunately, from an accounting standpoint, simply transferring car title to the business will only get the car payments out of your personal financial statements if the car lender will transfer the loan into the name of the business as well. Because the auto loan lender will want to maintain your personal liability, this is not likely to happen.

If there is a someone willing to make a gift of the money to pay off the car that you can pay back after the loan is processed, that might help get the car payment off your personal statement of net worth. Consult your mortgage underwriter on this issue.
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Customer: replied 3 years ago.

I am a realtor and drive a gazillion different places. Is that commuting? I hope not!

Customer: replied 3 years ago.

we only have 1 office and it is in our home

I would probably go with claiming all miles as business miles, keep very thorough documentation, and you should be able to make the business mileage argument pass muster if there was ever an IRS examination.
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