Post Reply 
 
Thread Rating:
  • 0 Votes - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
buying your vehicle
10-11-2012, 06:52 AM
Post: #1
buying your vehicle
I am a business owner and want to sell my truck to my company. I still have a 25000 loan on the truck and the fair market value is around 22000. Any ideas how I would go about buying my truck (can my company pay for the loan or do I need to buy out first?)
Please advise.
Find all posts by this user
Quote this message in a reply

10-11-2012, 01:12 PM
Post: #2
RE: buying your vehicle
what kind of company structure do you have? incorporated company or sole proprietorship? Why do you want to sell your vehicle to the company? who is using the vehicle most? what percentage of use is personal, and how much is for business use?
Find all posts by this user
Quote this message in a reply
10-12-2012, 01:03 AM
Post: #3
RE: buying your vehicle
Incorporated company. The truck is used solely for business and i want to write off all expenses for it so i want to sell it to the company.
Find all posts by this user
Quote this message in a reply
11-10-2012, 04:40 AM
Post: #4
RE: advantages/disadvantages of company car
(10-12-2012 01:03 AM)jaclynu Wrote:  Incorporated company. The truck is used solely for business and i want to write off all expenses for it so i want to sell it to the company.

I found this article on the pros and cons of a company car.
When are company cars advantageous?
There are a few exceptions to the general rule above:

If the car is a highly depreciating vehicle, it may pay to own it for a period of six months, following which the director can purchase the car for it’s much reduced market value. In these circumstances, the company would bear the substantial loss arising in the short period of ownership, which may well be greater than the personal taxable benefits.

These benefits are broken down into two different types:

A stand by charge for personal use of the company’s vehicle, and
An operating cost benefit that applies if your employer paid the operating costs of the vehicle (gas, maintenance etc.)
The standby charge and operating cost benefits are calculated differently.

Standby Charge
The standby charge applies regardless of whether the vehicle supplied is primarily for business use or personal use. The calculation of the benefit differs slightly depending on whether your employer has purchased or leased the vehicle.

The standby charge is:

Employer Owned Vehicles

2% of the original cost of the vehicle (plus sales taxes) x the number of days the vehicle is made available to you / 30. This rate is reduced for car sales people to 1.5% of the average dealer costs for vehicles.

Note: The standby charge is based on the number of 30 day periods in the year and not the number of months. This can made a difference in the calculation of the charge.

If both you and your employer have contributed to the purchase of an automobile, the standby charge is reduced by the amount of your contribution.

Reduction of the Standby Charge

The standby charge may be reduced proportionally if both of the following conditions apply:

Personal use of the vehicle did not exceed 1,667 kilometres per month (20,004 per year), and
Business use of the vehicle was more than 50% of the kilometres drive.
If these conditions are met, your standby charge can be reduced to a percentage of total personal kilometres driven divided by 20,004.

Note: The actual proportional formula is:

A/B, where
A = The lesser of total personal kilometres driven or B.
B = Available Days / 30 x 1,667

Tips:

Keep a log book to record your use of the automobile as well as receipts. The log must record the total distance driven and the distance driven for work related use. The log must show:
Total number of kilometres driven
Total business kilometres for the year

The log can be an official trip log kept in your car or recorded in your appointment calendar. Choose what works best for you.
Consider requesting that your employer require you to return your company car to your employers control for periods when you will not be using it.
Driving to your place of employment is not considered business use. However, if you are required to meet with clients or make other business stops between your home and the office then the total travel during the day may be considered business rather than personal use.
The standby charge applies even when there are periods when you are not using the company car. For example if you travel out of town on business or take family vacations the standby charge will still apply for those periods unless your employer requires you to return the car and control over its use during these periods.
Find all posts by this user
Quote this message in a reply
11-28-2012, 01:08 AM
Post: #5
RE: buying your vehicle
Well indeed it is helpful info particularly the info about vehicle, 2% of the original cost of the vehicle (plus sales taxes) x the number of days the vehicle is made available to you / 30. This rate is reduced for car sales people to 1.5% of the average dealer costs for vehicles.

gold coast car rental
Find all posts by this user
Quote this message in a reply

06-12-2014, 12:12 PM
Post: #6
RE: buying your vehicle
I just returned to browse this forum after a long absence and noticed this post which is rather old now but thought I'd toss in a couple of comments too. I notice there was no information provided about the seating in the truck. If the truck can carry no more than three passengers (i.e. not a crew cab, etc.) then it might be able to be classified as a "motor vehicle" instead of an "automobile" - a significant difference in tax treatment. While an "automobile" attracts the standby and operating benefit charges, a "motor vehicle" has a taxable benefit based only on the personal mileage ($0.27/km this year.) There are a few specific rules that have to be followed to use that $0.27 rate, one being that there must be a written policy of no personal use of the vehicle beyond travel between home and office.

We had this problem arise in our business as our technicians take company vans home at night, often to go directly to/from job sites from home (business mileage) but personal mileage when they go directly between home and the office. As the vans carry only two passengers, they qualify as "motor vehicles" and avoid the standby charges.

We also looked at supplying a company vehicle to another employee, one that was classed as "automobile" so would have incurred the standby and operating benefits. The business mileage would not have been over 50% and this was not a good solution so was discarded as the standby is based on the original purchase cost and is calculated on that same original cost each year although the value of the vehicle is depreciating. After four years, the taxable benefit would have equalled the cost of the vehicle!

Canada Revenue Agency has a very good video on this subject at
http://www.cra-arc.gc.ca/vdgllry/bsnss/m...ng&fmt=mp4
It was required viewing for all our drivers to avoid complaints about having to keep detailed mileage logs.
Visit this user's website Find all posts by this user
Quote this message in a reply
09-26-2014, 06:36 AM
Post: #7
RE: buying your vehicle
The following link provides very helpful info. regarding this matter. Hope those interested find it beneficial.

http://www.bdo.ca/en/Library/Services/Ta...sense.aspx


Sincerely,
Madan CA
http://www.madanca.com
Find all posts by this user
Quote this message in a reply
Post Reply 


Forum Jump:


User(s) browsing this thread: 1 Guest(s)