Leasing personal property to corporation
I own a small business which is a S corp. I want to purchase a vehicle for the business. Would it be better to purchase it outright via the business or personally and then lease to the corp?
The vehicle is used and under $5,000.00 and will be used only for business purposes
1 Answer from Attorneys
Re: Leasing personal property to corporation
Since the cost of the vehicle is low, I would recommend that your business purchase the vehicle and that on your tax return you use standard mileage as an expense rather than depreciate the cost of the vehicle. I always look for the simplist way to handle such matters. I would recommend that you consult your CPA to determine whether it can be expected that you would have a better tax advantage for the standard mileage deduction as compared to the personal purchase and lease back so that the corporation has a lease deduction and you have income which may or may not match the depreciation deduction.