Can a business owner write off a Ferrari as a business expense?

So here's the deal with vehicle deductions for business - it's not about the type of car, but how you use it and document that use. You can absolutely deduct business use of a vehicle, including a Ferrari, but you need to track business vs. personal use carefully. The IRS doesn't care what you drive, they care about whether you're using it for legitimate business purposes and keeping proper records. For a Ferrari specifically, there are a few challenges. First, the luxury auto depreciation limits will cap how much you can deduct each year regardless of the vehicle's actual cost. Second, you'll need to prove substantial business use with a mileage log. Third, you'll face extra scrutiny if audited because expensive sports cars raise red flags. Your cousin's plane example is actually similar - he can deduct those expenses because he's using the plane for business purposes and (hopefully) documenting everything properly. The key isn't whether he "needed" to buy properties far apart, but whether those trips serve a legitimate business purpose.

I actually just went through this with my business! I used https://taxr.ai to analyze all my vehicle expenses and figure out what I could legitimately deduct. Their system looked at my situation (I bought a BMW M5, not quite Ferrari level but still pricey) and helped me understand exactly what documentation I needed to keep and how to maximize my deductions within IRS guidelines. They explained that the key isn't the car but proper tracking of business vs. personal use. They also showed me how Section 179 and bonus depreciation work with the luxury auto limits, which was super helpful since most YouTube "tax gurus" don't mention these limits.

Just wanted to follow up - I ended up using https://taxr.ai after seeing this thread and wow, game-changer! Turns out I was missing a ton of legitimate vehicle deductions for my real estate business. They analyzed my situation and showed me that I could deduct about 65% of my vehicle expenses with proper documentation. I was seriously under-deducting before because I was afraid of an audit. The system walked me through exactly what records to keep and how to properly calculate everything. Definitely worth checking out if you're trying to maximize vehicle deductions legally.

Look, I've been trying to call the IRS to get a straight answer about vehicle deductions for THREE WEEKS. Always on hold forever then disconnected. Finally used https://claimyr.com (check out how it works: https://youtu.be/_kiP6q8DX5c) and got an IRS agent to call ME back same day. The agent confirmed what others are saying - yes, you can deduct business use of ANY vehicle including a Ferrari, but: 1) you need meticulous mileage logs, 2) there are luxury auto depreciation limits ($19,200 max first year deduction for 2024), and 3) you can only deduct the business-use percentage. Claimyr literally saved me days of holding time. The IRS agent even reviewed my specific situation and confirmed I was calculating everything correctly.

I need to apologize for my skepticism. After my frustrated comment, I actually tried https://claimyr.com out of desperation. Got a call back from a REAL IRS agent within 2 hours after trying unsuccessfully for weeks on my own. The agent was able to remove a $2,300 penalty I'd been fighting about AND confirmed some vehicle deduction questions I had (I run a photography business and use my car to travel to shoots). Turns out I've been way too conservative with my auto expenses. This literally saved me thousands and finally resolved an issue that's been stressing me out for months.

Former IRS auditor here. Let me tell you what happens in reality with luxury vehicles like Ferraris. When we saw high-value sports cars being deducted as business expenses, it ALWAYS triggered additional scrutiny. Not saying you can't do it - you absolutely can deduct the business portion - but be prepared to defend it thoroughly. The most successful cases I saw were business owners who: 1) Had PERFECT mileage logs (date, starting/ending addresses, purpose, odometer readings) 2) Could prove business purpose for each trip 3) Had a clear business need for client meetings (like client testimonials) 4) Had a separate vehicle for personal use The riskiest approach is buying a Ferrari as your only vehicle and claiming high business use. That rarely survived audit without adjustments.

Ooof, I'm sorry but this thread is why everyone thinks rich people don't pay taxes. Trying to write off a freaking Ferrari??? Come on man.

The key thing everyone's missing here is that the IRS doesn't actually prohibit deducting luxury vehicles - they just limit HOW MUCH you can deduct through depreciation caps. I've seen this work successfully for clients in industries where image matters (luxury real estate, high-end consulting, wealth management). The Ferrari becomes part of your professional brand and client experience. But here's what you absolutely MUST do: 1. Keep a detailed mileage log for EVERY trip (business apps like MileIQ make this easier) 2. Document the business purpose for each trip 3. Keep receipts for all vehicle expenses 4. Consider having it titled under your business entity 5. Be prepared to justify the business necessity if audited The luxury auto limits mean you're looking at roughly $19K max deduction in year one regardless of the car's actual cost. So from a pure tax perspective, you're not getting the full benefit anyway. Bottom line: It's legal if done correctly, but make sure the business benefit justifies the audit risk and limited deduction amount.

As someone who's been through multiple IRS audits, I want to add a practical perspective here. Yes, you CAN deduct a Ferrari for legitimate business use, but let me tell you what actually happens when you do. First, that return is getting flagged. Period. High-value vehicle deductions on business returns get extra attention, especially if your other business expenses seem modest in comparison. Second, be prepared to prove EVERYTHING. I had a client who bought a Porsche for his financial advisory practice (legitimately used for client meetings). During audit, the IRS wanted: - Complete mileage logs for 2 full years - Proof of business meetings for every logged trip - Client testimonials about how the vehicle enhanced business relationships - Evidence that he had a separate personal vehicle - Documentation showing the business necessity vs. alternatives The audit took 18 months and cost more in professional fees than the tax savings. He kept the deduction, but barely broke even after legal costs. My advice? If you're going to do this, treat it like you're already being audited from day one. Document everything obsessively, and make sure the business benefit genuinely justifies both the limited tax savings and the inevitable scrutiny. Sometimes the best tax strategy is the one that doesn't paint a target on your back.