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    dsstrini's Avatar
    dsstrini Posts: 1, Reputation: 1
    New Member
     
    #1

    Oct 22, 2013, 06:02 AM
    Personal Car Purchase
    The owner of the company purchased a car for his wife and the installment payments are coming out from the company's bank account and is being expensed as auto expenses. Since the car is not booked as a company asset I told him we cannot be making car payments from the company's account for an asset that belongs to him personally. Can anyone advise if this is correct because he does not agree with me.
    Thanks
    Fidget1's Avatar
    Fidget1 Posts: 105, Reputation: 4
    Junior Member
     
    #2

    Oct 22, 2013, 12:49 PM
    I agree with you. There are ways that it can be legitimate depending on the business. The substance of the transaction is either the business providing a loan, or, the owner making drawings from the business. Either way, it is wrong to put it through the accounts as a business expense seeing as it's not a business expense, and will lead to a lower taxable profit as well.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #3

    Oct 22, 2013, 01:31 PM
    Two words; Tax Fraud

    Nuff said?

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