Can my corporation claim my vehicle on their tax return?
January 22, 2003
Subject: A question
Date: Thu, 12 Dec 2002
From: Paul
Michael,
I am a CPA and a member of the San Jose Chapter of the Cal Society of CPAs.
I have a client with a C Corporation who has a vehicle with is registered in his name. The corporation makes all the payments on the loan and he treats it as a corporate asset.
Is this a potential problem in an audit? Do you have any experience with this situation in an audit?
Thank you in anticipation.
Paul
Answer
Date: Fri, 03 Jan 2003
Hello Paul,
Yes. Anytime you have a vehicle used for business purposes, there is a potential audit issue. Since the title for the car was taken personally, payments on the loan could be found to be compensation or dividends, and the depreciation may be disallowed for the car. The vehicle use can be reimbursed as an employee business expense. I suggest that your client and you get together with a tax attorney and clean this situation up.
Good luck!
Mike Gray
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links
© 2025
Connect on LinkedIn
Connect on BlueSky
Connect on Instagram
Our Blog