Car purchase as expenses

Forum|Forum|4 years ago
July 12, 2022
5 replies
35 views

I have an LLC. can I sell one of the house and buy a new car under company name.? Can the purchase of the car be shown as expenses and bring down the capital gain tax from the sale of the house

TurboTax Basic Online

Best answer by Critter-3

Yes but no ... to a lay person it will look like that but ordinary income/expenses and capital gains/losses are treated differently on the return.

Your single member LLC will sell a property where the sale will be reported on the form 4797 and the cap gains will go to the Sch D and any ordinary income from the depreciation recapture on the form 4797 to the form 1040. If you have not been depreciating the property that you owned and rented then RUN to a local tax pro to get this corrected properly.

Then your LLC buys a new vehicle on which you will either use the standard mileage rate to expense the auto OR the actual expenses + depreciation and/or 179 deduction. Again if all this is greek to you please sit down with a local tax pro to be educated better.

Critter-3

Level 15

You are mixing up cap gains income on a Sch D and ordinary expenses on the Sch C ... although they may offset each other in the long run on the form 1040 they do not directly impact each other on the same form.