Tax Consequences of Buying a
For every business owner, there comes a time when the old vehicle will no
longer suffice. Or, perhaps this is the year that you need a special purpose
vehicle such as a delivery truck or van.
At some point, nearly every business owner will have to consider purchasing,
leasing, or otherwise obtaining
a vehicle. Before you purchase a vehicle, becoming familiar with the
following tax matters may help you save money:
taxes may be imposed on the vehicle that you purchase.
vehicles such as gas or electric-powered cars are eligible for special
expensing election may allow you to deduct up to $3,060 of the cost of a
vehicle placed in service in 2001 (this amount is adjusted periodically for
Once you've made the decision that you need a vehicle for
your business, our first recommendation is that you try to
conserve your capital by converting a vehicle you already own to
partial or full-time use in your business.
Remember this: vehicles generally depreciate in value and are
poor investments in and of themselves. If you are the owner of a
new business, whatever capital you have should be put into the
things that will most directly generate revenue - and that
usually won't include a new car.