Do you operate your business as an S corporation or a C corporation?

If yes, does the corporation own the vehicle that you use for business? And do you also use the corporate vehicle for personal purposes?

If so, you need to read this article.

Situation

To put this is perspective and make it easy to understand, let’s say you use the corporate-owned vehicle 80 percent for business and 20 percent for personal purposes.

Vehicle

First, we need to define a “vehicle.”

To know what a vehicle is for tax purposes, you have to dig into the IRS regulations where the IRS defines an “automobile” as any four-wheeled vehicle manufactured primarily for use on public streets, roads, and highways.1

As you move down the road with the IRS on this definition, you find that the following vehicles are like-kind: cars; crossover vehicles; sport-utility vehicles (SUVs); ... Log in to view full article.