Vipers and Tax Write-offs?

[Gerald Levin]

Here's a guy selling his Viper and claims his business name on his car entitles him to a tax write-off?
http://cgi.ebay.com/ebaymotors/SILVER-AND-BLUE-ACR-GTS-SHOW-CAR_W0QQitemZ4569116456QQcategoryZ6209QQrdZ1QQcmdZViewItem
Item number: 4569116456
True or false? I know years ago, a luxury/exotic vehicle used strictly for business, could literally be deducted (depreciated?) over a 3 year period. Then a few thousand MD's, DDS's, professionals, etc., killed that little tax shelter. So if you do have your business name on your car can you get a tax deduction (over how many years?) or do just get one of these infamous letters:
GREETING FROM UNCLE SAM! YOU HAVE BEEN SELECTED FOR ONE OF OUR AUDITS.....

 

[Matthew Klinger]

i don't know about all that, but I do know the guy I bought my car from had the loan through his company and therefore I would guess he could write off the interest. I am not sure what other benifits there would be.

don't know why he needs the sticker to get the write off

my .02 cents

 

[Qualitywires.com]

I know a doctor here that owns several exoctic cars and Vipers. He opens up his garage twice a year and lets the public come view them. Everything he has is a tax write off for him because of this.

 

[FLOORIN04]

Yes you can write them off but only a certain dollar amount a year or %.I think it is the gvw that allows what % or dollar amount.Again i am not up on taxes but this is what i remember hearing.Talk to your accountant to see how you can write it off.Alot of people say it is for advertising expense.



REMEMBER ANYTING IS LEGAL TILL YOU GET CAUGHT.
THANKS
IRS

 

[Brian 95 RT]

I'm a CPA so I'll chime in. You don't need a sticker on your vehicle to write it off, but you have to use it for business purposes more than 50% of the time. The sticker just makes it look more legit to the IRS if you get audited. There are what is called Luxury Auto Limits which basically limits the amount you can write off as depreciation each year on your Viper - which means the actual writeoff of the car each year is squat. But you can write off your gas, oil changes, and repairs & maintenance - this total times your business use percentage.

Most of us would have a hard time arguing to the IRS that we use our Vipers for business most of the time. A low risk way to get some benefit is to not depreciate your Viper, but just write off the gas and maintenance - that's what I do!

 

[Jeff Lemke]

Brian,

What about a case like mine where I use the car for constant reference to fit the product? The cars a NEEDED to fit each hard top made. They are more like my assembly fixures than cars. Also, the car is a MUST for developing the a new product. How much could I get away with?


Jeff

 

[Flexx91]

Brian,

What about a case like mine where I use the car for constant reference to fit the product? The cars a NEEDED to fit each hard top made. They are more like my assembly fixures than cars. Also, the car is a MUST for developing the a new product. How much could I get away with?


Jeff

The problem is the risk worth the reward (that's if you get audited)? As mentioned in a earlier post, if you get audited, you must prove that this vehicle is used at 50% of the time for business purposes. Some folks elect to use the actual vs. standard deduction. The standard deduction allows you to deduct expenses such as oil, maintenance, tires, etc. The actual allows you to deduct annual accumulated mileage used for business (mileage must be documented). The problem with Vipers is that most don't accumulate a lot of miles or have a lot of maintenance performed on these vehicles within a twelve month period (would you use a Viper for deliveries or commutes?). Therefore, the deduction would be minimal. Effective for tax year 2003, you can take a Section 179 (entire cost of an asset in one year) deduction but the Gross Vehicle Weight Rating (GVMR) must be at least 6000lbs. Unfortunately, Vipers do not fall into this category (that's why you see so many H2's on the street).

If you are a stakeholder in a corporation, you can actually lease your personal vehicle to the corporation. Would look better to the IRS if a corp. is leasing an Impala from you as opposed to a luxury exotic such as a Viper.

To answer your earlier question about writing off your Viper for accessory fit-checks (your so-called business), at some point in time you'll need to show a profit. Operating continually at a loss may raise a red flag to the IRS. Once you show a profit, then you'll owe the IRS (catch 22 situation)! If you start a corporation solely for the purpose of owning a Viper, you can get an alter ego suit filed against you!


Not worth it. Hope this helps.

 

[V10SpeedLuvr]

Most of us would have a hard time arguing to the IRS that we use our Vipers for business most of the time. A low risk way to get some benefit is to not depreciate your Viper, but just write off the gas and maintenance - that's what I do!

Writing off the gas could pay for our Vipers at the rate of these insane gas prices!

 

[opnwide]

I have a separate company called DK Racing that is in the business of advertising. They charge my office reasonable advertising charges of $2000/yr, and DK Racing uses it to go racing, buy tires and parts, and generally promote the business. $2000 is about less than 10% of my total advertising budget. I keep track of business contacts generated by the Viper in case the IRS asks. Its not a huge write off, but I feel its legit.

 

[Brian 95 RT]

Brian,

What about a case like mine where I use the car for constant reference to fit the product? The cars a NEEDED to fit each hard top made. They are more like my assembly fixures than cars. Also, the car is a MUST for developing the a new product. How much could I get away with?


Jeff

Jeff - your case is a little tricky because you need the car to fit your tops, but the IRS determines business use by the number of business vs personal miles driven. But there are exceptions, and I think yours would fall into that category. Personally, I would depreciate all or most of the cost of the Viper because it is necessary for your business. Second, for gas, oil changes, and maintenance - I would write off only what your actual business miles are as a percentage of total mileage. Your business miles could be things like going to shows and events to market your tops. I would consider this reasonable enough to pass an IRS audit.