Jump to content
ATX Community

Vehicle Titled in S Corp Shareholder Name


David

Recommended Posts

Client purchased a new truck in his name and has it capitalized in his S Corps books. His previous tax preparer allowed his previous vehicles to be depreciated and actual expenses deducted in the S Corp books even though the vehicles were titled in the single shareholder's name. The SH owner's personal use was included as W-2 income.

So, in the past, the SH owner's vehicles titled in his name has been allowed to be treated as a company vehicle on his 1120S.

It seems as though this treatment is common. I am trying to convince the client that he can't treat the vehicle as a company vehicle unless it is titled in the S Corp's name.

Am I the only one that seems to think this is a problem or do most of you not allow clients to do this?

Thanks.

 

Link to comment
Share on other sites

I have run into this same problem with S Corporation clients several times in recent years.

With my clients the problem arose because of a lazy salesperson who didn't want to do the extra paperwork told my clients they didn't need to register the vehicle in the corporate name.  My firm policy is to make the client go back and have the paperwork redone correctly, which they have done.

  • Like 2
Link to comment
Share on other sites

40 minutes ago, David said:

Am I the only one that seems to think this is a problem or do most of you not allow clients to do this?

We don't allow it. When they do it and refuse to get it fixed, we remove the asset from the books and tax return, treat all loan payments and vehicle expenses as distributions and do a journal entry at year end for business mileage at the standard rate with a credit to additional paid in capital. The client loses the deduction for interest on the truck, since it's a personal vehicle, but doesn't have to add anything to their W2.

Link to comment
Share on other sites

26 minutes ago, WITAXLADY said:

I have them bill miles used from personal to business every month...

as usually using mileage

Business vehicles are usually titled in business thank goodness - ie work vans etc...

And I'm sure your clients like mine keep contemporaneous and accurate mileage records 🤨

  • Like 1
  • Haha 1
Link to comment
Share on other sites

well - I do hand out small calendars for that purpose with a clip pen attached for those that do not use apps

and I stress when you get in write down the odometer and where you are going!!

Get more every year!!!

I am amazed!

And I stopped ordering the fancy leather calendars as I could not even get rid of 10% to clients  - don't use!

As I don't either...

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...