Buying a used car for business???

I'm considering buying a used minivan for my photography business. I'm currently doing mostly youth sports team and individual stuff but hoping to do more events, and seniors.
I haul equipment around in my own car and I'm getting tired of dinging my car with light stands and all of the other things that go along with that. So that started me to thinking about buying an older used minivan or SUV and I've done some online research regarding taxes and such but I'm curious about other possible pitfalls that I've probably not thought about.

If the car is purchased for the business it can be 100% tax deductible and all related expenses can be written off and accounted for such upkeep, gas and such I do believe. I may have to buy the car from an individually in my name and immediately transfer the title to the business.

Now this will be something in the range of $4,000 - $5,000 dollars and I've been checking cars.com and such to see what's expected for that price. Mostly 2000-2004 range with around 100k miles.

I don't do a ton of work as photography is my part time thing but I though it would be good to keep the gas, upkeep and all separate, plus the added space would be nice since I got rid of my larger car and got something smaller. I might have to borrow money from myself and pay it back as I go along for this purchase.

If anyone has done this any advice would be greatly appreciated and if anyone has any other insight that would be appreciated. I expect that if I get replies they will be all over the place but that's cool too. You never know what tips might actually be helpful.

I am in Texas by the way.

PM me.

If you are operating as a sole proprietor or as the sole member of Limited Liability Company, then there is no need to purchase the automobile in the business name. You can keep it in your individual name and just maintain records separately for your business, as you normally would.

The rules governing the personal use of vehicles in a business are exhaustive and I think you'll benefit from a brief conversation with me as opposed to me writing it all down and you reading and possibly misinterpreting the rules or my summary.

Keep in mind that commuting (driving from your house to your office is not considered business-use). If you have a home office, then you will need another vehicle to support the 100% business use argument.

I'd be happy to explain it all to you.

One thing I will offer, having had my company own vehicles and real estate over the years, be sure you keep everything separate and document the heck out of everything. If you buy this vehicle either in the company name or personal name, get yourself a mileage log and use it everytime you take that vehicle out. Track your mileage and what event you are going to. This will be useful if the IRS ever asks you for evidence that it is not being used for personal reasons.

Buy what you need. Keep good records.

At the end of the year, your accountant can help you decide whether to depreciate the vehicle and write off other vehicle-related expenses, or simply take the standard mileage deduction. When you buy a (low cost) used vehicle, the standard mileage rate is often a better deal.

But it should be a decision made by you and your accountant, not by anonymous people who post on photography forums.

Curtis N wrote in post #15194907
Buy what you need. Keep good records.

At the end of the year, your accountant can help you decide whether to depreciate the vehicle and write off other vehicle-related expenses, or simply take the standard mileage deduction. When you buy a (low cost) used vehicle, the standard mileage rate is often a better deal.

But it should be a decision made by you and your accountant, not by anonymous people who post on photography forums.

Thanks Curtis,

The forum is just a starting point and it can possibly equip me with questions that I would have never thought to ask an accountant.

A word of caution about transferring the vehicle from your name to your business. I did that once for the benefit of having commercial plates. When that situation changed and I wanted to transfer the vehicle back to me personally, I was required by the DMV to pay sales tax on the vehicle for the second time.

Also, as stated above, talking to your accountant is probably the best advice that you'll get.

Foodguy wrote in post #15196289
A word of caution about transferring the vehicle from your name to your business. I did that once for the benefit of having commercial plates. When that situation changed and I wanted to transfer the vehicle back to me personally, I was required by the DMV to pay sales tax on the vehicle for the second time.

Also, as stated above, talking to your accountant is probably the best advice that you'll get.

Wow, really? Something I would have never thought about. Thanks!!!

Foodguy wrote in post #15196289
A word of caution about transferring the vehicle from your name to your business. I did that once for the benefit of having commercial plates. When that situation changed and I wanted to transfer the vehicle back to me personally, I was required by the DMV to pay sales tax on the vehicle for the second time.

Also, as stated above, talking to your accountant is probably the best advice that you'll get.

Interesting. Considering that you were selling the car back to yourself, couldn't you have sold it to yourself for $1 and only had to pay sales tax on that dollar?

The state says "An individual can make a gift to a business, but a business can't make a gift to an individual".

And when transferring, regardless of the amount shown on a sales slip, they consult blue book values to determine actual value.

Believe me, I tried...

Foodguy wrote in post #15206242
The state says "An individual can make a gift to a business, but a business can't make a gift to an individual".

And when transferring, regardless of the amount shown on a sales slip, they consult blue book values to determine actual value.

Believe me, I tried...

Hm. My state goes by actual sale price, at least for P2P. I don't know about the B2P or vice versa catch though here in PA.

Talk to your accountant. There are issues doing this, but there are good reasons to as well. As with anything that is listed as part of your business, when you sell it you must report the sale of it and pay tax on that sale....among other things.

cdifoto wrote in post #15208896
Hm. My state goes by actual sale price, at least for P2P. I don't know about the B2P or vice versa catch though here in PA.

My state typically does that also, unless there's a big discrepancy in value vs. price...then they revert to value.