Writing off your Viper through business -- How do YOU do it?

MannyC

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Guys, I know some of you must somehow write off your Vipers through your business. How are you doing it? I know about leases, but I am talking about when you are buying or have bought it outright?

I am probably going to be trading in my Z06 on a Hummer H2 this weekend, and I know that through the end of this year, any vehicle over 6000 pounds can be purchased and fully written off as an equipment purchase. However, I am still curious about how to best set it up for cars and performance mods, etc.

Manny
 

BIGBADCJ

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we have patient transport vans, so i write my mods off as vehicle maintence. nobody seems to notice my 7500 oil change lol
 

Mopar Steve

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You will really enjoy your H2. Be sure to take it and get it muddy. I took mine with the local Hummer club to a 1500 acre off road park and you won't believe the capabilities of that truck. the only thing that will out perform an H2 is an H1 and I'll trade the comforts on a '2 over a '1 for a daily driver any day.

good luck, shame you can't keep both.
 

Gerald Levin

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Just picked up a 4WD SUV when I heard about the tax loophole about the H2. Any concern that they may pass some kind or retroactive tax bs to negate your tax benefits? I guess, that would be no problem if the benefit is no big deal to you. In any event, the H2 is an awesome vehicle.

BTW, any of your guys remember the good ole days when you could write off your business vehicle over 3 years? I once bought a Rolls Royce and completely wrote that car off in 3 years. During my annual IRS audit, the agent asked what percentage was personal/business? I said 100% business and had a log to back it up. Of course, he did not believe I never used it personally, and only gave me, I think about 50%, but that is life.
 

jkracer9

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You call it bought for PR. Take a client to lunch and drive the Viper. No more than renting a sign by the freeway for business. "The car opens doors to capture new clients", a business expense.
Anything and everyting related to the Viper is an expense towards client relations. Enter the Viper in a car show w/ a sign next to it with the name of your company, promotional. No different than the Antique pick up parked next to the lumber yard. A brake shop here has 2 prowlers in the drive, catches the eye and brings in business. :headbang:
 

GTSnake

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From what I understand the tax deduction is extended to the end of next year. We're planning on getting a vehicle early next year as well but the H2 just will not fit in our garage.

Sorry for the hijack Superbar....
 

BLOWNGTS

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If you own the business and it is an S corp. you cannot by law deduct any car other than travel miles. Now if you do not own your business as an S corp. then yes you can right it off as equipment purchase. Not sure how you would right off the Viper unless you entertain in it. Which is very possible. LOL
 
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MannyC

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If you own the business and it is an S corp. you cannot by law deduct any car other than travel miles. Now if you do not own your business as an S corp. then yes you can right it off as equipment purchase. Not sure how you would right off the Viper unless you entertain in it. Which is very possible. LOL

I have a C Corp and an LLC, so it can run through either.
 

Brad04Mamba

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If you own the business and it is an S corp. you cannot by law deduct any car other than travel miles. Now if you do not own your business as an S corp. then yes you can right it off as equipment purchase. Not sure how you would right off the Viper unless you entertain in it. Which is very possible. LOL

As far as auto expense goes, an S Corp is no different than any other legal entity, if your accountant told you this he is mistaken.

As far as the viper is concerned, as long as its used for business you can right off the business expenses in that percentage. Because of the luxury auto depreciation limits though it would take probably twenty years to fully depreciate it. :)

Brad (CPA) H
 
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MannyC

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How could you set it up to write off the full purchase of a Viper vs. depreciating it (like you can with a Hummer H2) assuming you buy the car outright? Instead of classifying it on your taxes as a vehicle, can it just be put in as a business expense and write off the whole dang thing? I am going to be meeting with my accountant in a few weeks, but thought I would go in with some ideas from those of you who may have already done this previously.
 
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MannyC

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Manny here is an article on writing off your H2.

http://stacks.msnbc.com/local/pisea/104601.asp?cp1=1

It was great when I had mine. I enjoyed my H2 I just couldn't drive for more than a couple hours without stopping at a gas station for petrol. Let me know if you are still interested in that splitter.

Thanks Bernie, but that link is dead. Do you have another one?

Manny
 
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MannyC

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Wow, I like this part of the article:

Pierman, the Bellevue accountant, calculated the $38,000 deduction by taking an H2 costing $55,000 -- and presuming the buyer falls into a 40 percent tax bracket. Many SUV buyers are in this category, he said.
For 2002, a qualified buyer can take an immediate deduction of $24,000.
After that deduction is taken, about $9,300 can be deducted through a bonus depreciation on capital expenses, part of post-Sept. 11 legislation.
In addition, there's the normal depreciation over five years that can be taken on vehicles used for business. The 20 percent deduction in the first year is taken on the amount left after the $24,000 deduction and the bonus depreciation. That, Pierman said, comes to $4,340.
The total comes to $37,640 that can be deducted in the first year. That would reduce the buyer's income tax by about $15,000, he said.
 

Brad04Mamba

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Manny

Thats an old article, Bush passed a new law this year raising the 179 deduction to $100,000. So if its 100% business you could write the whole thing off.

As far as the viper goes, its not over 6000 lbs so its considered a luxury auto, no way around it, so the restrictive depreciation rules apply.
 

farrbar

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If you already own the car, your options are limited. My favorite option for cars that don't qualify for the 6000 lbs. is to structure a lease with very high payments (paid by the business), but with a very low residual. Then, at the end of the lease you personally buy the car for like 10k. Your business will get the benefit of deducting the lease payments. I know someone that did this on a Ferrari 550. I have owned a Bentley, Porsche and am on my 4th Viper.


Farrbar
 

Vic

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I was thinking of doing this with some of my exotic cars but DIDN'T WANT TO GO TO JAIL! :rolleyes:

That presumes you would be doing something illegal!

The tax laws, along with their provisions for vehicle expenses, are totally on the up and up!

They are set up the way they are to help small businesses grow, which helps put people to work, increases the tax base, etc etc.

Even a luxury automobile has a purpose in small business growth, and especially vehicles that can carry heavy loads, like our new 10,000# GVWR Ford 350 truck, used for construction.

Don't worry about "the way things are", just figure out which way the wind is blowing, and set sail!
 

BANKTHIS

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You don't have to buy a H2 to qualify for the tax break. Almost any of the SUV's qualify. The car just has to be rated at 6000 GVRW. I used the tax break in 2001 on a ML320 and 2002 on a Suburban. I always smile when people comment on my low gas mileage. It doesen't seem to hurt as much even when it get's over 2 bucks a gallon.

Barry
 

Pictureman

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Start a photography busines and sell pictures with people posing with your car. I've only had mine a few months and I think I more than cover the payments with additional portrait customer sales.
Tim
 

ViperRay

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Pictureman,
The question is, what percentage of your miles on the car are "business" miles? Unless you're barely driving the car for your own pleasure, driving to and from photo shoots alone may not qualify you to deduct it.
 

inVision

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If you want to be moderately aggressive, you can write it off through your company as an advertising expense. You should definitely have a different "transportation" vehicle. This way if it costs 80K, you can write off the full 80K. If you were financing, say for 5 years, then to be on the safe side, I would write it off accordingly. Save your receipts, trophies, photos, etc, from car shows and track days, and make your car a part of your company's image. That's what I'm doing with my R, and it's very easy to prove it's not a transportation vehicle. Since I'm in the marketing/design business, I've used my car in a couple of my ads as well as some clients' ads.
 

Pictureman

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ViperRay
I'll probably end up with about 80-90% business. I photograph mostly race cars and High School seniors so the school car shows, cruise events, viper meetings etc are business trips. I don't really drive it that much otherwise. I take the other car for non business stuff.
 
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MannyC

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What if you write an online newsletter about picking up chicks, and you use your car to help you out with this feat. 100% write off?
 
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