NSX as a business expense

[Spider]

Has anyone bought an nsx for their own business, and taken deductions as part of their business expenses? including cost of gas, maintenance, insurance, and depreciation?

I would like to hear your opinions on this (pros and cons) as I am starting my own business as a software consultant. As part of the business, I would be traveling and living out of state for 6 to 9 months at a time, so why not get a 91-96 nsx and use it for the business, and take expense deductions each year?

 

[nsxtasy]

You can do this. And you can deduct your actual expenses if they are higher than the standard mileage rate. However, a few cautions:

1. You need to keep meticulous records for all business mileage - date, departure point, destination, purpose, people met with, odometer readings, etc. Same thing for your expenses - save those receipts! (For items $25 or more.)

2. You can't count travel to and from your place of business (IOW commuting mileage). And if you are a consultant but are working on a long-term basis at a single site, that is considered your place of business.

3. The depreciation deductions have extremely low limits. This is why leasing may give you a better tax break than owning the car, if you use it primarily for business.

Disclaimer: I am neither an attorney nor an accountant. Consult with your licensed tax adviser for advice regarding your particular situation.

 

[ss_md]

2. You can't count travel to and from your place of business (IOW commuting mileage). And if you are a consultant but are working on a long-term basis at a single site, that is considered your place of business.

Disclaimer: I am neither an attorney nor an accountant. Consult with your licensed tax adviser for advice regarding your particular situation.

Loop-hole - If your place of business is your 'Home Office' then you can claim mileage to your first and last client of each work day.

Read up on all of the ways the IRS helps you save money as a business owner. Here is a link to the IRS: http://www.irs.gov/publications/p463/index.html

Disclaimer: I am not an attorney or an accountant. You should seek advice from a licensed tax adviser/attorney/accountant regarding all financial and legal matters.

 

[nsxtasy]

Loop-hole - If your place of business is your 'Home Office' then you can claim mileage to your first and last client of each work day.

True, but if you are working at the same client almost every day for a long period of time (say, six months or a year), the IRS may consider that to be your place of work, and you may not be able to claim that mileage. Again, check with your adviser...

 

[DanO]

Since the NSX is under 6,000 lbs. gross, you can’t write it off in the first year. Therefore, it will show as an asset on your balance sheet and be deprecated over a long period of time. Every year, you will have to pay payroll taxes (edit: and income taxes) for your personal usage based on the car’s value. In my state, insurance for business vehicles is more expensive. If you sell the car, you will have to pay some sort of income tax or payroll taxes to get the money out of the corporation, which can be as high s 50%. Your meticulous records and any tax savings will always be subject for review and possible penalty by the IRS.

I’d first figure how much cost savings you are really looking at and then figure out if it’s worth the hassle and potential audit risk. Then I’d ask your CPA. You should be able to charge back to the company, miles (at the current IRS rate) you drive your personal vehicle for business purposes.

Loop-hole: there are no loop-holes. You either pay the IRS or your attorney, but either way you pay and you will get audited someday.

Disclaimer: I’m a janitor.

DanO

edit: added income tax payable.

 

[ekin95]

My Dad owns his own business and has had a BMW, Benz, and now the NSX and they are and were all considered business cars. We do it all by the book w/ the IRS and our accountant helps us out and he has never had 1 problem.

 

[Spider]

Thanks everyone for your inputs. You guys brought up questions I would have never thought to ask. I will definitely seek advice from a CPA about this. Thanks again!

 

[jeff_L]

I just multiply business miles by $0.36, and put it as a deduction. Of course, this is on my Integra, which costs much less than that to run. The other methods above sound like a bigger break if you want to claim an NSX.

Jeff

 

[poet_x]

can the purchase of an NSX (new or used) be written off as a business expense? I wonder if it could be used as an advertising expense if you display your company logo/website/etc. on the vehicle?

 

[nsxtasy]

can the purchase of an NSX (new or used) be written off as a business expense?

As with any expenditure on capital goods, the purchase itself isn't written off, but it can be depreciated, so that the depreciation expense is deducted. For details, see the link that Scott (ss_md) provided.