Lease Gt350

[AGGT350]

Im not

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[rambunctious]

thanks for the comments

for me it is about driving my dream car, while developing product for it, and taking advantage of the allowed tax breaks of expenses (100%) vs multiyear depreciation schedule on a business investment, and minimizing capital investment for a tech startup.

after development is done, I buy it personally from my own company and keep driving it for many years.

just looking at options

Ramb

 

[JCSIX13]

thanks for the comments

for me it is about driving my dream car, while developing product for it, and taking advantage of the allowed tax breaks of expenses (100%) vs multiyear depreciation schedule on a business investment, and minimizing capital investment for a tech startup.

after development is done, I buy it personally from my own company and keep driving it for many years.

just looking at options

Ramb

what are you developing?

 

[rambunctious]

Some Audio technologies

Ramb

 

[Moogatwo]

thanks for the comments

for me it is about driving my dream car, while developing product for it, and taking advantage of the allowed tax breaks of expenses (100%) vs multiyear depreciation schedule on a business investment, and minimizing capital investment for a tech startup.

after development is done, I buy it personally from my own company and keep driving it for many years.

just looking at options

Ramb

Technically not 100% deductible as you'd be required to pick up a small amount of income on it from the IRS leased auto inclusion rules. However, still better than purchasing/capitalizing under your business, because you're depreciation deduction would be waaaaaay limited under the luxury auto rules.

 

[FP350S]

Some Audio technologies

Ramb

Its certainly is in need of that!

 

[lm1z]

The way they hold their value it would be better to do just that. On a zero down 72-month loan with a good interest rate, you can probably get out of the car in 2 to 3 years and at the very worst break even. This is assuming an MSRP or less deal.

Exactly what I did
Got car at under MSRP, rolled in a bit of negative. Ran the amortization and came to the same realization, which ultimately made the deal a no brainer for me.

 

[rambunctious]

Thanks moodatwo
This is the detail i am looking for to discuss with my accountant to make the best decision

Ramb

 

[lm1z]

thanks for the comments

for me it is about driving my dream car, while developing product for it, and taking advantage of the allowed tax breaks of expenses (100%) vs multiyear depreciation schedule on a business investment, and minimizing capital investment for a tech startup.

after development is done, I buy it personally from my own company and keep driving it for many years.

just looking at options

Ramb

Ramb,

It seems like you are well informed, but I figured I would at least bring this up just in case:

FWIW, have you also thought about putting the car in your name (rather than in the business') and having the company add this as a fringe benefit to you? This can be done as a lease or a purchase with the same tax benefit.

If you classify this as your primary vehicle, you are eligible to claim 80% work use / 20% personal use. As a benefit to you, you only add 20% of the total of your payments to your gross wages (W2) and pay taxes on that additional amount at the end of the year.

If you/you're accountant does not believe you can classify the vehicle as your primary, as a secondary vehicle, you claim the full 100% but only end up paying tax on this amount. This is all still done through your business in pretax dollars, which obviously is another added benefit.

In example:

$1000/mo payment - easy math (purchase or lease)
12mo. of payments, $12,000
As a primary vehicle, claim 20% as income, or add $2,400 to your gross wages. Estimate 35% in taxes, or $840 out of pocket for the whole year.
As a secondary vehicle, claim 100% as income, or add $12,000 to your gross wages. Estimate 35% in taxes, or $4,200 out of pocket for the whole year ($350/mo.)

While there are pros and cons of running this on your own credit, I have never found an issue qualifying for a home, or any additional credit I request, as I can always provide proof using cancelled checks (showing that the business provides this as income), effectively lowering your DTI ratio.

Best,
Lane

 

[rambunctious]

IM1Z
this is the exact detail I was looking for
thanks for the feedback.


Ramb

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