Business truck

[natiro]

S-Corp contractor client wants to purchase a new truck before end of year. Personal use of the truck will be minimal. . .maybe 10%. In past years, shareholder owned the truck personally and was reimbursed for business mileage. New truck will be over 6,000 GVW and we'd like to fully expense in 2005. Here's the glitch. Loan rate through credit union if truck is titled personally is 5.65%. Loan rate if titled to corp is 7.15%. Also, insurance is about double if truck is titled in corp name.

For some reason, which I can't seem to be able to find support for at the moment, I've assumed that title to truck must be held by corp to consider the vehicle a corp asset and qualify it for Sec 179 at corp level. But I'm wondering. . .is there anyway that title can be held by shareholder but the truck can be considered a corporate asset? Corp would pay all truck related expenses and shareholder would pick up compensation for personal use.

If you think this can be done, can you provide support? It never hurts to ask, although I don't have high hopes!

[Bees Knees]

I don’t know of any way to say a truck titled to one owner is owned by someone else. I suppose you could make the claim that the title is for convenience purposes only and that the corporation is the real owner because asset transfer documents were signed and the corporation is making all the payments. But even if the IRS buys it, I think you would get in trouble with the insurance company and the finance company. They might consider it to be fraud.

[JON]

Insurance agents

A friend had all agents (5) vehicles set up on the books. Upon audit agents(IRS) noted the vehicles were in the owners names not the corporations and was going to allow only mileage. Agents through their attorney had a letter assigning all rights of ownership to the corporation and stated the vehicles were purchased individually because of the insurance savings(remember these are agents). In this case it worked, but no promises. Personal use within the corporation is/has to be charged back to the operator-vehicles should always be 100% business-because of the personal use charge back. You guys all have to be busy doing that now.