A year ago I bout a 1/2 ton chevy for $8,000 for personal use, then I added a light bar, plow, and reese hitch. Can I sell the truck to my trucking company as a means of taking money out of my business and write the payments off as a business expense! Also being that it was upgraded Can I pay myself $10,000 rather than the $8,000 that the truck was originally purchased for! P.S. sorry for the topic typo!
You could but you'd have to pay the taxes on two different ends. You personally as income, the company would pay sales tax on it. It would most likely have to be insured under the company policy and all the commercial vehicle laws would be applicable to it, like No radar detector etc since it's owned by the company and you are considering it a commercial vehicle and I am assuming you are going to use it for company business. You'd have to keep up with the mileage and depreciation as well. You can sell it to the company for what ever price you want, just remember if you get audited that the price should be close to fair market value or it will raise a flag with the IRS. Be sure if you sell it to the company that you claim it as income on your personal taxes because the paperwork will leave a trail back to you.
The answer is NO. There are anti churning laws on the books that prohibit profit from related parties(owning the corp and yourself). But your accountant should know this. You can transfer the asset to the corporation for the book value. No gain or loss. Then you can take a note or payment out. This is not meant as tax advice.
Being able to write off the payment may offset the taxes paid, also the advantage of being able to write off the maintenance and repairs is an incentive being that I will still have use of the truck when I need it!
Wouldn't I have to go through the formalities of signing a contract with myself to verify the agreement, and keep records of the payments for the IRS?
Yes you would. You should document all transactions throughly and remember you cannot make a profit on anything that you buy, sell, or lease to the company.
