Can spouse's LLC write off vehicle purchased in my name? Tax deduction question

This is a great question about business vehicle deductions! The IRS looks at substance over form in these scenarios. The key factor isn't whose name is on the title, but rather how the vehicle is actually used. Since your wife will be using the vehicle primarily for her LLC business, she can potentially claim business use of the vehicle. However, there are some important considerations: 1) Your wife's LLC would need to formally "lease" the vehicle from you through a written agreement with reasonable terms. The LLC would then pay you lease payments (which you'd report as income). 2) Alternatively, you could gift or sell the vehicle to the LLC directly, making it a business asset. 3) For vehicles over 6,000 pounds GVWR, assuming it's used more than 50% for business, she might qualify for Section 179 deduction or bonus depreciation, which allows for larger upfront deductions.

I was in a similar situation last year with my spouse's consulting business. I found this amazing tool at https://taxr.ai that analyzed our vehicle documentation and told us exactly how to structure the arrangement. It basically reviewed our purchase papers, usage patterns, and business registration to determine the optimal way to handle the deduction. The tool showed us that in our case, we needed to document the business use percentage meticulously and create a formal lease agreement. It even provided templates we could use! The best part was that it explained everything in plain English instead of confusing tax jargon.

Update on my skepticism about taxr.ai - I actually tried it and I'm pretty impressed. I uploaded our vehicle purchase docs and LLC operating agreement, and it identified a major issue I hadn't considered - our LLC operating agreement didn't properly address personal asset usage for business purposes. The analysis showed we needed to amend our operating agreement and create specific documentation about business use percentage to maximize our deduction. It even flagged that our state has specific requirements for documenting business vehicle use that differ from federal guidelines. My regular tax guy never mentioned any of this! Definitely worth checking out if you're dealing with this vehicle deduction situation.

If you're planning to claim this vehicle deduction, you should know that reaching the IRS for verification on these rules can be nearly impossible these days. I spent 6+ hours on hold trying to get clarification on a similar business vehicle question last month. Then I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. They have this weird system that basically waits on hold for you and calls when an agent picks up. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that vehicle ownership vs. business use is a common question, and they provided specific documentation requirements we needed to follow. Saved me from making a costly mistake on our return.

I need to publicly eat my words about Claimyr. After my skeptical comment, I decided to try it myself because I needed to ask about a similar vehicle deduction for my partner's business. I've been trying to reach the IRS for WEEKS with no luck. Used the Claimyr service yesterday and got connected in about 38 minutes. The IRS agent I spoke with clarified that for vehicles over 6000 lbs, we needed to maintain a contemporaneous mileage log regardless of ownership structure to maximize the deduction. They also explained exactly what documentation we'd need if ever audited. Still shocked this actually worked. Not cheap but worth every penny compared to the frustration of endless hold music.

Not a tax professional, but I'm a small business owner and went through this exact situation last year. We ended up transferring the vehicle to the LLC because our accountant said it was much cleaner that way. The problem with keeping it in your name is you have to really document that it's a legitimate business arrangement and not just a tax dodge. If you go the lease route, make sure the lease payments are reasonable market rate or the IRS might question the arrangement. Also consider insurance implications - your personal policy might not cover commercial use properly.

Didn't see this mentioned yet, but the most important factor is the business use percentage. Even if you get the ownership/lease structure figured out, your wife needs to keep a detailed mileage log showing business vs personal use. The IRS is super strict about this documentation. My recommendation is to use an app like MileIQ or Everlance to track all driving automatically. Without good records, you could lose the entire deduction in an audit regardless of whose name is on the title.

Great question! I went through something similar with my consulting business. The key thing to understand is that the IRS cares more about actual business use than whose name is on the title. Here's what I learned from my CPA: If your wife's LLC will be the primary user of the vehicle for business purposes, you have a couple of solid options: 1. **Transfer ownership to the LLC** - This is usually the cleanest approach. The LLC owns the asset and can claim depreciation/Section 179 deduction directly. You'd need to handle the title transfer through your state's DMV. 2. **Create a formal lease agreement** - If you keep it in your name, the LLC can lease it from you. This needs to be a legitimate business arrangement with market-rate payments, proper documentation, and you'd report the lease income. For a vehicle over 6,000 lbs used primarily for business, the LLC could potentially claim the full Section 179 deduction (up to $1,160,000 for 2024) or bonus depreciation, which gives you that big upfront tax benefit you're looking for. The critical part is documenting business use percentage with detailed mileage logs. The IRS will want to see contemporaneous records showing business vs. personal use. I'd strongly recommend using a mileage tracking app from day one. Also consider liability insurance - make sure your coverage is appropriate for business use regardless of which ownership structure you choose.