Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Corporate Owned Assets

Posted by taxguru on July 24, 2005

Q:

Hello Kerry,

We just bought a some what expensive boat out of our corporation.  We will use the boat both for personal and client entertainment.  Would it be an OK idea to depreciate this asset on our corporate return?

Thanks for your input.

A:

It would be the same as with a car or any other vehicle.

There are a couple of main ways in which it can be handled.

You can just depreciate the business usage percent of the boat’s cost.

or

You can depreciate it as 100% business usage and then you either:
  reimburse the corp for the personal usage

or

include the value of the personal usage in your W-2 wages. 

Kerry

 

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