Client is an S Corporation that has a luxury auto with a net book value of $30K. The shareholder trades this auto in on a personal vehicle purchase. The trade in value is $5,500. Is this a sale to the dealership of $5,500 and the corporation takes the loss and shareholder has a $5500 distribution? or is this a related party sale and the loss is not deductible. Can anyone point me to some authority on this. Thanks!
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To me, the shareholder took the s-corp car out of the s-corp to be traded for a personal car. So the s-corp car was "sold" or distributed to the shareholder and then he/she took it to get the personal car.
I am just thinking through.
Was the s-corp car actually in the name of the s-corp or the individual shareholder? -
It was titled to the S Corporation.Comment
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