Cybertruck as Business Expense ?

[LexusCyber]

I am considering starting a company and doing a lot of work on the side to pay for the CT from income that is not from my primary income ( salary at a high tech company)

since I have about 1..5-2yrs to figure out how to do this properly, I am looking for advice from the bright and creative minds here ( and also in a few other places) ! anybody can tell me how would they do it.

I've been considering the following ideas:
1-uber /lift exclusively to from airport
2-home inspections
3-consulting on building data products
4-personal nutrition coach who goes to customer home
5-tour guide for my city ( offering 4hr blocks of time in the weekend and creative tours with the CT to a family or group of 4.... cool stuff included!)
6- crystal /reiki/ healing sessions at customer home ( that is a tall one but I am willing to learn)

what other ideas can I explore creatively so I can somehow pay for my CT from my company's revenue and NOT from money I currently earn from a salaried position?

bring it on! the crazier the better. thank you Cybertruckers!

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[cvalue13]

Wym?

the IRS rules for “writing off” a vehicle such as this are complete with various requirements to prove up how much the vehicle is used for the purposes business

to write it all off, you must prove up that it’s ~100% used for business purposes only, titled to the name/ownership of the business, etc. If they ask, and you can’t prove this up, then the penalties and unwinds will end up costing one more than they intended to “save” by writing off the vehicle.

Short of that, if you claim it is 50% attributable to the business, you have to prove *that* up with eg detailed milage records and usage descriptions, etc. - or else, again, it’ll cost you.

Meanwhile, there are knock-on requirements and costs such as commercial auto insurance, etc.


Of course, a person who legit purchases vehicle for a business knows and is prepared for all this.

But separately, there’s a stream of folks who instead seem to have eg had a *bright* idea that they’ll put a business decal on the truck, still use it like a personal vehicle, and take all the tax advantages of a commercial vehicle.

*those* sorts of bright ideas, are the sort of thing the IRS has thought about once or twice before (see ie the proof the IRS requires)

 

[Gurule92]

the IRS rules for “writing off” a vehicle such as this are complete with various requirements to prove up how much the vehicle is used for the purposes business

to write it all off, you must prove up that it’s ~100% used for business purposes only, titled to the name/ownership of the business, etc. If they ask, and you can’t prove this up, then the penalties and unwinds will end up costing one more than they intended to “save” by writing off the vehicle.

Short of that, if you claim it is 50% attributable to the business, you have to prove *that* up with eg detailed milage records and usage descriptions, etc. - or else, again, it’ll cost you.

Meanwhile, there are knock-on requirements and costs such as commercial auto insurance, etc.


Of course, a person who legit purchases vehicle for a business knows and is prepared for all this.

But separately, there’s a stream of folks who instead seem to have eg had a *bright* idea that they’ll put a business decal on the truck, still use it like a personal vehicle, and take all the tax advantages of a commercial vehicle.

*those* sorts of bright ideas, are the sort of thing the IRS has thought about once or twice before (see ie the proof the IRS requires)

Yea, I've been weighing these options. Luckily Lyft and Uber track your online mileage and you just compare that to your total mileage for the year to get your percent usage for business. I just don't know enough about it and don't know if I'll even be doing Lyft and Uber long enough to take full advantage of the tax benefits. And if I stop I don't want to have to recapture anything. So I'm still weighing the options for sure.

I hope they just let me order the 79k one soon so I don't have to do these mental gymnastics lol

 

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[kappaknight]

This seems to be the part that everyone forgets. Even if you use it 100% for business, you need to track your miles.

This is why I bought the lifetime subscription to Tessie. It does all of that tracking for me, and I can tag the drives as work, etc. I’m sure there are a couple of others that do similar tracking, but Tessie was created for this exact purpose.

 

[igs]

Pretty sure it's the IRS that's doing all the stealing.

 

[sirozha]

My CPA told me that IRS might audit if the vehicle is considered highly unnecessary for the business. For example - do you really need a Cybertruck if you are running a massage salon? I’m sure we can come up with 100s of creative reasons, but IRS should buy it.

I’ll just wait for IRS to catch up on CT’s capabilities before writing off. Of course CT is needed to attract customers at a massage salon

The Cybertruck doesn't have massage seats, so owning a massage salon along with the Cybertruck makes all sense in the world.

 

[sirozha]

For me, I need the full in the first year. Just depends how much your tax liability is going to be and how much you need to write off!

It doesn't work like this. Under Section 179, you can't deduct the entire cost of the vehicle. For 2024, the maximum is $30,500 under Section 179 in the first year of ownership plus for 2024, you can deduct 60% of total price under the Bonus Appreciation rule; this amount reduces to 40% in 2025, 20% in 2026, and 0% in 2027. Whatever remains will have to be depreciated according to the depreciation schedule.

However, if you want to transfer the Cybertruck from the company ownership to private ownership, you would have to recapture the bonus appreciation (i.e. pay the IRS all the taxes that you saved on the depreciation), and then, as your company sells the Cybertruck to you, there will be a profit (equal to the market price minus remaining after Section 179 deduction value) that will be taxed (at the company rate if it's a C-Corp or at the personal rate if it's the S-Corp or LLC).

Essentially, if you want to use the company to pocket this $7,500 of credit but transfer the vehicle to yourself, you will end up not saving much on taking the deductions, as you would have to pay the taxes you saved on the deductions later when you transfer the Cybertruck to yourself. Also, you will have to have proof that you are using the Cybertruck for company business more than 50% of the time. Additionally, you will have to get a commercial insurance policy on the vehicle while it's registered under the company (which is more expensive than under a personal policy), and you will have to pay your accountant to properly take the Section 179 deduction, the bonus depreciation deduction, properly show the depreciation based on the tables, then recapture the bonus depreciation, then properly register the sale of the company property to yourself, then pay the tax on the profit, etc. It will cost you a grand or two just to do this transaction in extra CPA fees.

After a year or two, when all of this is settled and your Cybertruck has been transferred to your personal property, you will end up paying about the same as you would have if you bought it outright for $80,000, and you would avoid raising any red flags with the IRS.

 

[sirozha]

This seems to be the part that everyone forgets. Even if you use it 100% for business, you need to track your miles.

This is why I bought the lifetime subscription to Tessie. It does all of that tracking for me, and I can tag the drives as work, etc. I’m sure there are a couple of others that do similar tracking, but Tessie was created for this exact purpose.

What happens now with Tessie that Tesla has jacked up the API costs to the point that third-party apps find it unaffordable to continue to use the Tesla third-party API?

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