Selling personal vehicle to one's own company

[steakman]

I have a 2006 GMC diesel truck. I have just "sold" it to my company for 18,500.
I understand that I cannot claim any CCA this year..??

Also as it is a used vehicle what dollar amount do I use in calcualting CCA next year.? Do Ineed to use the original purchase price... seems kinda weird to have to do that.?

Thank you,

Stk

[Brenner]

How did you determine the price of $18,500? Assuming no use of special elections, typically transferred in assets into your business is done at FMV at the time of the transfer regardless of what you paid yourself for it. That FMV amount is what you would add to the proper vehicle class, not the original purchase price, and you can actually claim CCA in the first year. To determine the FMV probably just find some Autotrader ads of similar trucks (same make, year, condition).

[Charlie]

"You" can't claim CCA personally if you were previously entitled to do so because you do not own the car at year end. But your company can. Value should be fair market value at time of transfer. Do check if you're triggering taxable auto benefits, and if you're required to pay a transfer tax. (Used to have pay Provincial Sales tax in BC for the transfer -- not sure if that applies still, or elsewhere).

[kcowan]

We when we got audited by CRA, it was not paying sales tax on equipment transfers that got us. And our CFO was ex PWC.

[marina628]

We are a marketing Company and purchasing a very expensive sport car in 2010 triggered an Audit.I am sure you have all seen cars with logos all over it and this was a statement for our business.Because my husband and I own 100% of the Corporation CRA even asked for proof we owned personal Vehicles and we had to show them bill of sales for them too.The car had 4000km and we had to make a log book for the car to show where we used it for business .18 months later it only has 9000 kms now as it is not the sort of car you would drive unless it is a nice sunny day.They disallowed the HST credit over $30,000 on the car even though the Car represents out 'Brand' and the Corporation does enough business in a year to purchase 20 of these cars .So don't miss anything on the paperwork as it can come back to bite you in the ass

[steakman]

As for transfer tax, to my understanding there is no such thing in Alberta. I asked at the registry at time of transfer of ownership if any taxes were owing, I was told no. As for FMV, that is what I used to calculate price. I am aware of "personal use" of company vehicle. However I am curious as to its status if it has full company markings on it and whether that has any bearing on "pers use". I am however still keeping mileage log and noting business miles only.

As for CCA, that is something I had no plan for personal taxes..it was the business side asking. Given I incorporated in late June I am going to assume that any CCA will be pro-rated and as such will only be able to claim 1/2 of what a full yr would allow.

Thanks guys/ladies.!

[skiwest]

Your first mistake is its GMC rather than Dodge. Every rig welders truck that I've seen is Dodge. I guess thats why your an inspector rather than a welder.

[steakman]

Your first mistake is its GMC rather than Dodge. Every rig welders truck that I've seen is Dodge. I guess thats why your an inspector rather than a welder.

Have welded for over 35 yrs. Journeyman ticket (Ab), Fitter for 3..and just got fed up with in shop BS. This beats the freakin daylights outa working for some else by a long shot. Contract is the way to go in the patch.

As for my preferred ride: Well...all I can say is:

367,450km - Zero Engine issues - Zero Transmission issues (6spd Allison) - Zero Injector issues - 2ndary oil filtration/3 fuel filters w/lift pump, banks..and a bunch of other stuff that works for me.

21mpg at 70mph.

And best of all it makes me $$...

for a look see: http://www.dieselplace.com/forum/vbp...o=hall&u=55782

Next truck.? Denali HD.....loaded. ON lease of course eh.!

Cheers,

[TaxGuy]

Steakman:

1. Use the price you sold it to the company for…$18,500. However, you should try and ensure the price is something close the market value. If this is more than you paid for the truck, you will have a gain to report personally. If there is a loss, there is nothing to report or claim.

2. The corporation can claim CCA. In the first year, it would be half the regular rate (half of 30% or 15%). If this is the corporations first year, the CCA must be prorated by the number of days in the fiscal year.

3. If you were using the truck for business purposes prior to the sale, then you can claim CCA yourself but will have a disposition.

4. You may have to pay sales tax on the transfer if you were personally registered for the G/HST. If not, then there would be no issue.

Finally, you can sell it to the company or “roll-it over” in exchange for shares. I would suggest a sale and take a note payable from the company in return. The corporation can then pay you back.

[Brenner]

As for CCA, that is something I had no plan for personal taxes..it was the business side asking. Given I incorporated in late June I am going to assume that any CCA will be pro-rated and as such will only be able to claim 1/2 of what a full yr would allow.

Thanks guys/ladies.!

Remember that your corporate year end does not need to be December 31. You can pick any date. It is a little surprising that you incorporated without discussing these things with your accountant? Are you transferring other assets into the corp? As Taxguy mentioned there are special "roll-over" provision in the tax act when transferring assets into a corp in the first year of the corp, but typically they are utilized to defer any gains that would be triggered. Vehicles and equipment don't typically appreciate so I wouldn't worry about it.