If I write off a new vehicle purchased under my LLC as a business expense will that carry over to my W2 income tax liability?

[Edward_Martin]

Passive Activity Loss question in tow parts. Starting an LLC Rental Car Service and renting a new car on Turo. My question is will I be able to deduct it as a business expense and will the typical 5 year deduction carry over to my W2 income if the car itself does not make enough in in taxable income to fully cover said deduction?

[Anonymous_ · Accepted solution]

Rental of personal property (any property other than real property) is typically not subject to the passive activity loss rules.

[Edward_Martin]

So in other words the deduction of the vehicle will in fact help offset my W2 liability?

[Anonymous_ · Accepted solution]

Yes, if this is a trade or business in which you materially participate (which it should be if you are renting personal property).

[Critter-3]

If this is a single member LLC not being taxed as a corporation then this is reported on a schedule c on your personal tax return. Any loss on the schedule c can reduce other income on your tax return.