New Vehicle under personal name for sole owner s corp

[Doo]

I am the sole owner for s corp.  In 2018, I bought an electric vehicle Tesla S under my name.  My questions are: 1. Do I list the vehicle as S corp asset? 2. If yes, am I putting the loan liability as S corp liability even though the loan is under my personal name? 3. I am entitled to $7500 federal tax credit.  Do I file form 8936 on both my personal return and s corp?  4. Should I put the credit on K-1, part III #13, code P for the credit on business use?

[PhyllisG · Accepted solution]

The car is considered personal no matter how often you use it in your business.  It is not in the S-Corps name.  Therefore, any credits or loan liabilities are personal and should not be reported as a S-corp asset.

You can have the S-Corp reimburse you for the business percentage use of the vehicle under the actual expense method if you chose to pay all the car expenses.

You can also have the S-Corp pay some of the car expenses and classify it on the Form 1120-S as a loan or an advance to you.

The key is to retain meticulous records and keep mileage logs in case of an audit. 

[Doo]

Am I doing the depreciation on 1040 in my case?  It is a bit confusion because the software keep on directing me to do the depreciation on 1120S.