Q: Hi, I wanted to know how true this is post?https://forum.leasehackr.com/t/commercial-leasing-for-companies/11701/16
Basically this guy is claiming that you can write off a car lease 100% as a business expense assuming the lease is made under the business name and as long as you create an agreement between you and your company stating that if I cover the cost of maintenance, insurance & upkeep, then the company will allow me to use the vehicle for personal use (as long as I work for the company) and I fulfill my end of the "business deal".
This would be a business agreement in writing between me and my business. The business would consider the lease payments as a business expense due to this agreement. And just to add, my business is a legitimate profit-making business.
Is this legal to do despite the fact that I own the company?
A:
No.
First of all it doesn't matter what sort of agreement you have the IRS will look at what actually happened This is called form over function.
Second, your personal use of the vehicle is taxable as a wage or a guaranteed payment depending on the entity.
The correct method is to track mileage and reduce the business use by the personal use percentage, or add the personal usage to the owner's compensation.
Unfortunately that plan would be unwound relatively quickly in an audit.
Bruce Alexander Minnick agrees with this answer
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