Is this an LLC asset or personal?

[JoshinNC]

Client has multiple discussions with us about purchasing new vehicle for MMLLC owned by client and spouse prior to 1/1/11. Last week client drops off documents to begin on LLC return and I ask for bill of sale on new truck (saw it sitting in parking lot, so I knew he bought it). Faxes the bill of sale in and it is in HIS PERSONAL NAME!!! I told him MULTIPLE times to purchase and register in LLC name. My question is (I think I know the answer), is the truck an asset of the LLC for depreciation purposes or is it a personal asset and he is stuck with taking mileage?

Thanks in advance!

[ChEAr$]

No contest. The truck is not owned by the LLC, and unless there is an accountable plan in place to reimburse him for business mileage, there is no deduction.

[kpangelinan]

Client has multiple discussions with us about purchasing new vehicle for MMLLC owned by client and spouse prior to 1/1/11. Last week client drops off documents to begin on LLC return and I ask for bill of sale on new truck (saw it sitting in parking lot, so I knew he bought it). Faxes the bill of sale in and it is in HIS PERSONAL NAME!!! I told him MULTIPLE times to purchase and register in LLC name. My question is (I think I know the answer), is the truck an asset of the LLC for depreciation purposes or is it a personal asset and he is stuck with taking mileage?

Thanks in advance!

On one hand, I've been through audits, where the client was the sole owner of the LLC/S-Corp/C-corp and it was allowed. Auditor preferred the asset to be in the company's name, but allowed it as a corporate asset.

On the other hand, I've heard from many professionals that for liability protection, better to have the company reimburse for mileage....I think either way will be fine.

[JoshinNC]

That's what I was afraid of

Going through his January bookkeeping stuff he went out a bought another truck in January and put that one under his personal name also. Guess they never learn!

[tpnl]

Business Insurance

I would take actual expenses if taxpayer could prove he carries business insurance on the vehicle. Personal vs business insurance = more money to tell the insurance agent it is a business vehicle. That could also prove intent in the case of an audit.

[luke]

business or personal

We had client last year who did same thing - "company" truck in personal name - employee had an accident in truck - "personal" insurance policy would NOT pay off because it was being used in business???
Would be easier to call "business" IF it was single mbr and not mult mbr?

[ChEAr$]

We had client last year who did same thing - "company" truck in personal name - employee had an accident in truck - "personal" insurance policy would NOT pay off because it was being used in business???
Would be easier to call "business" IF it was single mbr and not mult mbr?

Nope. it's either titled by the LLC or it isn't.
Has nothing to do with number of members.

[Gretel]

My two cents. It either belongs to the LLC or it doesn't. Since it doesn't he needs to reimburse himself for mileage or actual expenses. He only can do this if he has something in his Operating Agreements that states that he is required to pay some company expenses himself and that no reimbursement is available plus some other things. It's somewhere in TTB.