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    Jdtruck1's Avatar
    Jdtruck1 Posts: 1, Reputation: 1
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    #1

    Oct 27, 2007, 06:28 AM
    Tax law on leasing
    How do I lease a personally owened veh to my LLC and not have to show personal income at the end of year taxes? Thanks Jon
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Oct 28, 2007, 06:51 AM
    As I answered on the email, you CANNOT do what you propose, at least not legally.

    The LLC (if it is a partnership or corporation) is a separate tax entity, but the IRS is NOT stupid. They recognize that you are getting personal benefit from the lease and will expect to see the money paid as income on your tax return.
    Mobea's Avatar
    Mobea Posts: 220, Reputation: 15
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    #3

    Oct 28, 2007, 05:55 PM
    Couldn't the income be listed on Line 21 Other Income and attach a statement deducting the expenses of interest paid and depreciation? A lot of times these two expenses can narrow the net income considerably. But it must be appropriated to percentage of business use only.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Oct 28, 2007, 09:01 PM
    If the LLC is a sole proprietorship, then he is NOT leasing to a separate tax entity. He is leasing to himself both in fact and in the eyes if the IRS.
    Mobea's Avatar
    Mobea Posts: 220, Reputation: 15
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    #5

    Oct 29, 2007, 01:30 AM
    True. Interest expense and depreciation/or milage (whichever is applicable) are expenses that he can deduct anyway on a Sch C.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #6

    Oct 29, 2007, 10:25 AM
    Agreed, but compared to the deduction he would have gotten if the leasing expense could be had, that would be peanuts.
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