Selling/Transferring Personal Vehicle to Business?

[schurchill39]

Not sure if this belongs here or in careers, mods please move if I got it wrong.

Has anyone gone through the process of transferring their vehicle ownership to their business? My accountant recommended that I look into it however I still have have a bit of a balance on it that I am financing and as it sits right now the business doesn't have the funds sitting in it to pay fair market value for the truck to me. Could I transfer ownership to the business but make the payments from my personal account until such a time where the business does have a balance to pay for it? Or would that possibly complicate things with the finance company? The business is incorporated with me as the president/ sole shareholder.

I'd like to get a bit of an idea what I am getting into, or the right questions to ask before I call the finance company as I am always leary about what flags they might put on my account if I am just in the question asking phase and not ready to pull the trigger on it.

[ExtraSlow]

Is there really that much advantage? Can't you just charge your company kilometers?

[Sugarphreak]

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[Jlude]

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Is there really that much advantage? Can't you just charge your company kilometers?

Yes, if he owns the vehicle personally, he can be reimbursed from the company for mileage, but if the company owns the vehicles, up to $30,000 of the purchase price can be expensed and any/all related maintenance, insurance, etc. costs as well.

Do what Sugarphreak said if you can't sell/buy it outright.

[schurchill39]

Thanks Sugarphreak and Jlude, I didn't know about the loan options with interest and that seems like it might make the most sense and actually might work the best for me as I build capital within the business anyways. Would I need to change the financing through the dealer to the business name as well or keep financing in my personal name although it would be owned by the company? Should I expect any complications with the dealer financing with it being in a business?

As far as insurance goes it sounds like I'll have to have a sit down with Masked Bandit to figure out that aspect of things before I pull the trigger on anything.

[bigboom]

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Yes, if he owns the vehicle personally, he can be reimbursed from the company for mileage, but if the company owns the vehicles, up to $30,000 of the purchase price can be expensed and any/all related maintenance, insurance, etc. costs as well.

Do what Sugarphreak said if you can't sell/buy it outright.

It only makes sense to transfer it to the business if the vehicle is 100% used for business purposes. If the vehicle gets any personal mileage on them it's a lot more work to charge out the usage of that vehicle.

[ExtraSlow]

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It only makes sense to transfer it to the business if the vehicle is 100% used for business purposes. If the vehicle gets any personal mileage on them it's a lot more work to charge out the usage of that vehicle.

This is what I thought as well. But I'm always looking to learn more.

[Jlude]

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It only makes sense to transfer it to the business if the vehicle is 100% used for business purposes. If the vehicle gets any personal mileage on them it's a lot more work to charge out the usage of that vehicle.

Are you an accountant, because only accountants get picky about stuff like that. He's going to be using the vehicle 100% for business. If his accountant asks him, he tells them it's being used 100% work. Everything he does is business related.

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Thanks Sugarphreak and Jlude, I didn't know about the loan options with interest and that seems like it might make the most sense and actually might work the best for me as I build capital within the business anyways. Would I need to change the financing through the dealer to the business name as well or keep financing in my personal name although it would be owned by the company? Should I expect any complications with the dealer financing with it being in a business?

As far as insurance goes it sounds like I'll have to have a sit down with Masked Bandit to figure out that aspect of things before I pull the trigger on anything.

Insurance won't be much different. There are a number of options. PM me if you need any ongoing advice and I can go into more detail about your questions and maybe offer advice based on how I've done everything.

[schurchill39]

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It only makes sense to transfer it to the business if the vehicle is 100% used for business purposes. If the vehicle gets any personal mileage on them it's a lot more work to charge out the usage of that vehicle.

It would be for business. For personal mileage you just need to record the kilometers which then get charged as a taxable benefit (plus some sort of standby charge that the accountant would figure out). That being said I have an SUV for our personal vehicle, the pickup would be for business. I've got a truck with my current employer and thats how it all works here as well. I tried to run my own personal truck and charge them kilometers because as an employee it would mean more money in my pocket, but it was much worse for the company so they kiaboshed that.

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This is what I thought as well. But I'm always looking to learn more.

If the vehicle is in the name of the business everything that goes into it is a tax deduction. Fuel, maintenance etc. In my conversations with her, she rarely sees a case where if the vehicle is used primarily for business that it is more beneficial to charge km. If you mainly drive to the office (main place of work) and only take the occasional trip to the field or another town yea then charging kilometers works and would be less complicated as you just run a mileage log, but not when you're all over the place all the time for work.

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Are you an accountant, because only accountants get picky about stuff like that. He's going to be using the vehicle 100% for business. If his accountant asks him, he tells them it's being used 100% work. Everything he does is business related.
Insurance won't be much different. There are a number of options. PM me if you need any ongoing advice and I can go into more detail about your questions and maybe offer advice based on how I've done everything.

Sent you a PM. Right now I am mostly interested in how the finance company will take my inquiry. I don't trust them to just answer some questions without fucking with my account as every time I have called before to ask questions its had some sort of impact.

[bigboom]

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Are you an accountant, because only accountants get picky about stuff like that. He's going to be using the vehicle 100% for business. If his accountant asks him, he tells them it's being used 100% work. Everything he does is business related.

Yes, I am. Based on your accountant and how they do things it can be different in terms of the advice you get as well. It's all going to depend on how his business is set up which I know nothing about, for example, if he has an office other than home and then clients/places he drives to, mileage to the office is actually personal usage which means all of that is actually a taxable benefit to him. There's all sorts of things that are going to be factors in determining how to set up the vehicle but in a lot of cases it's easier just to claim mileage, expenses are also claimable against the business, just claim the percentage of those expenses that are proportionate with the mileage claimed.

Not saying an audit would happen but having only a single vehicle that is either owned by the business or himself would definitely cast some doubt that 100% of that vehicle is used for business as well, if he had two vehicles, one personal one business owned that would be a lot easier if an audit was to happen. Again, many factors to consider when transferring a vehicle into a business.

[schurchill39]

The business' office is based out of my home so any meetings with clients or trips anywhere in the vehicle would all be business related. The wife and I have a second vehicle for personal use that my name is also associated to so anything personal we always just use that as its a pain in the ass to swap the car seat to the truck. Since I got another pickup truck through my current employer, my personal one has sat with the exception of a gopher hunt and a trip or two down the block to lowes (maybe 200 km in like 6 months). I'll be putting a vehicle in the business either way if I decide to pursue it, its just a matter of either transferring my personal truck into it or picking up another truck bought directly from the business account with money transferred from my personal account as a loan. It just seemed like less dicking around to use the truck that is already sitting there, but I just am not sure of the process.

EDIT: Does anyone work in financing at any major dealership?

[schurchill39]

Just wanted to follow up with this to close the loop. Thanks to a Beyonder for giving me a call and providing some insight. I also called the stealership to confirm what would happen in this scenario:
- Insurance and registration needs to match the ownership title. If the vehicle is under the business then those two would match what ever is on the title
- Insurance shouldn't be too much of an issue as you insure the person so it should only be a few hundred bucks more as its now for business use for me.
- To transfer a financed vehicle to a business you need to fill out a special transfer of ownership form and submit a $400-$500 fee. This basically is like reapplying for the loan except you should be able to secure the same terms as the original loan. (might be unique to Ford but probably the same everywhere).
- With a new business that doesn't have the assets built up, you personally may need to stay on the loan as a co-signer but you won't know until after paying the fee, which again, isn't a big deal but still something that needs to happen.

So I think with the hassle of reapplying for the loan under the company as opposed to just a straight transfer and not knowing if my name still needs to be on it or not I will just expense kilometers until the company as the cash to buy it straight up.