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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29799
Experience:  Taxes, Immigration, Labor Relations
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A company is an llc with two members. They use two trucks

Resolved Question:

A company is an llc with two members. They use two trucks in the business. Should they sell the trucks which they individually own to the llc and then depreciate the trucks costs in the llc. Do most llcs file as a partnership. They are a small business
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

Yes - LLC with several members is generally considered as partnership.

A partnership is the relationship existing between two or more persons who join to carry on a trade or business.

Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

Some additional information about partnerships may be found in IRS Publication 541 -


The LLC may choose to be treated as S-corporation. You may read more about different business structures here -,,id=200274,00.html


Members should not "sell" trucks to the LLC. If trucks are used for business - they are depreciated. If trucks are used partially for business and partially for personal purposes - the basis for depreciation should be prorated.


You may find more details in IRS Publication 946, How To Depreciate Property -


Let me know if you need any help.


Customer: replied 7 years ago.

The trucks are owned by the individuals, but used in the partnership(llc) for business purposes. Are the trucks depreciated on the individuals returns or on the partnership return? And on what form? Another question, can the partnership purchase and own a truck itself.

Expert:  Lev replied 7 years ago.

All business income and expenses are reported on the partnership tax return.

Partnership should issue schedules K-1 to each partner reporting net taxable income -


Depreciation is reported on the form 1065 line 16 -

and calculated on the form 4562 - - that form should be attached to the partnership tax return.


Yes - partnership may purchase and may own business properties - a truck or any other property. You may register the truck on the LLC name.

However - I suggest to consult with your insurance company if that will affect your insurance cost.



Customer: replied 7 years ago.
One last question and then I will pay extra. The trucks are owned by the individuals as individuals, but you say they can depreciated them on the partnership return even though the partnership doesn't own them. Thanks and I will pay. Ron
Expert:  Lev replied 7 years ago.

Yes - that is correct.

Each partner contributes money, property, labor or skill into a partnership - in your situations trucks are contributed into partnership - there is no need to change legal ownership or registration.


Income from partnership would be generally self-employment income and will be reported on the schedule C by partners - so generally if a specific property is used by that partner only - he/she may report depreciation on individual tax return - but that would be much simpler to report all expenses on the partnership tax return.


Let me know if you need any help and sorry for not able to respond promptly.


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