Your company renting from yourself

Discussion in 'Business Operations' started by Smitty58, Nov 22, 2005.

  1. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    Are there tax benefits of renting to your company. If you are a part time person chances are you have one truck which is your personal vehicle as well as your work vehicle. So can you rent that truck back to your company? I've heard of someone renting their office building that they own to their company ,so can you do the same thing for equipment?
  2. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    I don't think 'renting' is the proper term...but anyhow

    I do it with my truck. I 'lease' it to the company. I pay mileage...its currently at $0.425 cents. The benefits are that I do not have to claim the mileage reimbursement as income and the business gets to take this as an expense (tax writeoff). The 42 cents is derived from the government taking into consideration fuel costs, wear/tear, insurance, etc.

    With that said, there are also cons. For one...sometimes you wind up not getting enough back for the other words lets say a new transmission needed to be installed...the business can't pay for the repair...that was built into the mileage factor.
  3. bruces

    bruces LawnSite Senior Member
    Posts: 648

    The company would have to be a separate taxable entity, a corporation, llc taxed as a partnership, etc for this to be allowable.

    You can't rent from yourself (if you are operating as a sole proprietor or single person llc taxed as a sold proprietor.
  4. DLS1

    DLS1 LawnSite Bronze Member
    Posts: 1,619

    Hey Bruce you still in lawn business or back to CPA work only. I can't bring up your site.
  5. bruces

    bruces LawnSite Senior Member
    Posts: 648

    I'm still part time in the lawn business, but I let the web site go. I need to take it off of my signature.
  6. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    I believe in September it was raised to .485 cents per mile.

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