Leasing to myself

There's another reason. Not sure this is exactly what you are talking about doing, but...

If the business entity which owns the trucks also has operating authority they would be required to insure all trucks whether in operation or not. So often the motor carrier will form a second entity to own the trucks, this allows you to park a truck without insuring it. And yes, the lease payments are a tax deduction which could provide some benefit to you as well.

 

You are correct about insurance companies wanting to force policy holders to insure all equipment that is in their name. You can own the equipment personally and lease to your corporation and that should solve the problem with insurance. You can also lease equipment to your corporation and take some of the profits from the corporation in order to pay lower taxes. You only pay social security tax on earned income. Some avoid this tax by paying themselves a lower salary and the more in dividends or for equipment payments. You could potentially cut your tax bill by about 15% on that portion of your income.

 

I do know Papa Johns does this. Trans Papa Logistics is their trucking company. I'm sure it's mostly for tax purposes but the liability placement is surely a concern as well.

 

Another aspect of why larger (in theory) companies have several entities. It's a little thing called "liability".
Lets look at a hypothetical. Company A is a trucking company. Company AB is an equipment company and Company ABC is a payroll company. Employees are hired through company ABC so that if an employment grievance is ever filed, the employee can not come after the assets of A or AB. Similarly, if the employee has an accident with a judgment in the millions, the lawsuit cannot touch the assets of Company A, where the money is. CYA.

 

Sorry but this would still give you liabilities across the board with an accident. Every company will be touched as they have their hand into it so company A will end up paying just as would AB and ABC.

 

Look at if from purely tax purposes and possible insurance reasons. In terms of liability protection that ship has sailed many years ago. Control is the key that courts look at so even if you have different businesses but it is controlled by the one being sued they will go after it if needed for assets.