Edmunds Answers



  • 04350 11/12/09 9:53 pm PST

    Is your purpose income tax related or insurance related?

  • jb_turner 11/13/09 4:33 pm PST

    You are a bad risk... you will not be able to get a loan.

  • wantslux 11/13/09 4:57 pm PST

    Thanks for your responses. I am going to buy a used car outright so I wont need a loan. Im trying to figure out if any tax benefits from registering under a corporation will outweigh the cost of insurance.

    Which registration would save me the most money in the long run?

  • morin2 11/14/09 8:44 am PST

    This is a great question. Its also one of those that may bring up many more questions - so I hope that you're not looking for a quick & simple answer. I assume that your corporation is registered with the state and that the car would be used 100% for business use. In that case, the car should be considered an asset of the company. I don't know if it can be depreciated like real property, but the car expense should reduce your gross income as a business expense. I'm not an accountant and didn't stay at a Holiday Inn Express last night, so you know what they say about free advice...

    I think there are enough other factors involved, like the auto insurance, liability, etc., that a business advisor or accountant would be a good idea. If you're a student, maybe a business class or tax accounting class would be useful. I believe that you can even get free tax training from the IRS if you volunteer in their VITA program.

    I hope some others chime in here on this question.
    Good Luck!

  • 04350 11/14/09 4:25 pm PST

    I'm not an accountant but first is this a c corporation, a Sub-S or an LLC? Is the business incorporated? If the business is incorporated, do you realize that there will be some accountant's fees for preparation of the applicable corporate related tax returns such as a K-1 before you get to a Sched E? Do you own all of the corporate shares?

    Other than the vehicle related expenses, are you expecting a net loss or a net profit from
    the business related income?

    If you really are serious about doing this correctly, you'll need an accountant and probably an attorney to set this up correctly.


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