Forming an LLC (or S Corp) to lease (yes, lease)

[danpass]

I'm strongly considering forming an entity to lease a Tesla (considering a Model Y).

Have you done such a thing? What was your experience like?

My goal is writing off some of the lease (50%, maybe 2/3) as I plan to create Youtube content with the vehicle, as well as writing off other expenses relating to content creation.

I'm fine with personally guaranteeing the lease just curious about potential benefits and pitfalls of leasing through an entity.

 

[azuled]

I’ve never done this, so I cannot comment on your plan specifically.

Make sure you are aware of all the reporting requirements for an LLC. Make sure you understand the tax implications. Make sure you are prepared to file quarterly estimated payments if you expect to make money and/or have your health insurance through an LLC.

 

[ngng]

I'm strongly considering forming an entity to lease a Tesla (considering a Model Y).

Have you done such a thing? What was your experience like?

My goal is writing off some of the lease (50%, maybe 2/3) as I plan to create Youtube content with the vehicle, as well as writing off other expenses relating to content creation.

I'm fine with personally guaranteeing the lease just curious about potential benefits and pitfalls of leasing through an entity.

You should talk to a tax professional. Good luck justifying that to the IRS with no income

 

[DIYPSCM]

NEVER assume the IRS is dumb, and has never seen what you are attempting before.

I think they have a policy that if you don't show a profit in at least x out of y years you are deemed a hobby not a business.

LLCs are another thing... strict rules. Decide whether you want any income as business or pass through. If you don't know what that means stop now. Be prepared for such things as getting a business license, making/publishing a fictitious business name statement, business only bank account, etc. etc.

Good luck.

 

[Unclepaul]

Just having an LLC set up, does not mean that you have a functioning, for profit, company.

They will want you to justify your claims for deductions.

 

[ewoodrick]

You should talk to a tax professional. Good luck justifying that to the IRS with no income

Been there, done that. At one time it was a producing LLC, it didn't take long for them to notice that it wasn't income producing.

 

[ngng]

Been there, done that. At one time it was a producing LLC, it didn't take long for them to notice that it wasn't income producing.

How much before they started complaining? I recently started a business and have invested heavily in machinery. We generate some income, but definitely not enough to come close to breaking even.

 

[ewoodrick]

How much before they started complaining? I recently started a business and have invested heavily in machinery. We generate some income, but definitely not enough to come close to breaking even.

It was a few years, but to begin with it was producing all my income and then effectively none of it.

 

[ngng]

It was a few years, but to begin with it was producing all my income and then effectively none of it.

Ah makes sense. How'd that convo go with the IRS?

 

[ewoodrick]

Ah makes sense. How'd that convo go with the IRS?

Stop doing it. There were very little costs that I was applying anyway. It's not as if I was trying to deduct $100,000.

 

[ngng]

Stop doing it. There were very little costs that I was applying anyway. It's not as if I was trying to deduct $100,000.

Lol, well, I did deduct >100k, so we'll see what they say