business asset purchased with personal credit card

[tylerstoragebusters]

I purchased a storage container on my personal card for my business inventory. I don't have a business credit card so that's why it went on my personal card. It was $2,600. Am I able to claim it as a business asset and make monthly payments for it through my business bank account?

I have a interest free payment plan setup with my personal card for 18 months so its a fixed cost each month that I was hoping to pay from the business.

If I am able to do that, how would I categorize the monthly payment in QB?

Single member LLC if that changes anything.

[Critter-3]

Ok ... if you don't know what you are doing in QB then you can get real lost real quick so getting some education on how to properly enter things would be highly recommended. The QB program will do everything you need/want however if you don't understand the basic principles of double entry bookkeeping you can mess things up badly.  

Basics for your situation would be :

Loan from shareholder  for the cost of the asset and an addition to assets for the balancing act.   And then the payments made thru the business bank account  of the principle on the CC will be repayment of loan from shareholder and any interest is an expense.  

[Mike9241]

yes, it would be a business asset qualifying for a tax deduction.  best would be to get a debit or credit card for the business. if you're audited, segregating business items from personal items by using a different bank account, credit or debit cards usually makes the audit go smoother. however, this will actually depend on the IRS agent doing the audit. 

for QB questions go to the QB forum.

[Opus 17]

For any schedule C business, you are the business and the business is you.  It's as if you have two wallets.   You pay from one or the other, but its all your own money in the end.  It's a very good practice to keep accounts separate, but it is not required.  Your purchase is certainly a business asset.

However, deducting the interest as business interest depends on whether you can follow the tracing rules.  Can you prove that some particular dollars of interest are from the business purchase, and are not from personal purchases?  Can you fairly and accurately allocate the interest to business and personal items?  The more you use the card, the harder it will be to fairly and accurately allocate the interest.  (If you make a $1000 payment, whose to say if it should be applied first to the container or first to some personal expense?)

So at best, deducting the interest as a business expense will require good record keeping that allows you to fairly and accurately allocate a portion of the interest to the business.  Depending on your finances, it might be impossible to do this fairly and then you can't deduct the interest.

As I said, making the payment to the credit card company is just taking money from one wallet instead of the other, it's all your money.  To track this in QB, you would need to speak to someone on that forum.