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+--- Thread: Leasing to yourself (/showthread.php?tid=6934)
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RE: Leasing to yourself - ahub86 - 01-17-2021
Rawze. I see you weee pretty worked up ok this one. I have respect for you and this site. I just want to clarify I wasn’t trying to stir it up farther by posting. Just wanted to say it in a different way to maybe help this guy. I agree he needs an accountant we all do. Hell..I married one. Lol
RE: Leasing to yourself - Chamberpains - 01-17-2021
(01-17-2021 )Djmurria Wrote: You don't have to be rude about it was literally just asking because I don't know, and have very little knowledge of business taxes, and reading online wasnt helping me so I asked.
Not touting anything was just trying summarize my understanding so u could see where I'm coming from off what I've read and see if it would work.
Go ahead and kick me IDGAF I'm trying to get a better understanding of how stuff work and your being an ass about it. Sorry I wasn't born knowing all the tax jargon and what not. I even dropped the lease and trucking company and just wanted info on business taxes in general, which you just gave in between you being rude in the last post, which helped thanks.
Yup, and you'll never forget the lesson you were just taught about taxes, will you? Rawze does this for that exact purpose. Hes really a nice guy. Keep your big boy pants on and keep asking and learning (preferably not on how to commit fraud with your taxes)
This place is here for great knowledge without the BS shenanigans. There's only 1 way to keep it that way... and you just learned what that way is.
RE: Leasing to yourself - smorgan87 - 01-17-2021
Creating a leasing company is how big companies protect assets from liability, not to commit tax fraud. If you create a leasing company that purchases trucks then lease the truck to the authority then ur authority will pay the leasing company (and write off the lease payment) but now ur lease company has to claim that income and can only write off depreciation of the asset so what did u accomplish? Nothing (probably paid more taxes). Many equipment finance companies these days are structuring their loans as leases for this purpose. U write off all payments thru the loan instead of depreciating the asset. Of course once paid off you no longer have that deduction.
RE: Leasing to yourself - Rawze - 01-17-2021
(01-17-2021 )smorgan87 Wrote: Creating a leasing company is how big companies protect assets from liability
...
(my own understanding on this subject based on detailed conversations with a lawyer on this very subject, I am not any sort of legal advice)...
That liability part is only partially true though ... it only holds a bit of water if the LLC holder (person who owns the company) had nothing to do whatsoever with the trucking operations and specific routes that the truck goes at the time something bad happens.
O/O's, accountants, and CPA's alike are not lawyers. I am not either, but I had a detailed discussion about just this subject on LLC, corp. protections with a high-end trucking lawyer a few years ago on this very subject (I have known this individual personally for many years, it is not simply hear-say). The man's salary is in the 7 digit range .. and that is all he does for a certain mega-fleet who owns thousands of trucks, his job it is to do nothing but sue other trucking companies that cause accidents with the mega-fleet.
Essentially it comes down to ppl easily mistaking the limited LLC/corp. protections out there (does not matter how many layers you make it) as direct liability protections, when in fact most often, the situation is quite the opposite. It is easily overlooked that if your the owner of said company and your also the driver of it (or even on or near the truck) .. or have direct route control of the truck, when, where, and what roads to take directly, etc. ... those LLC and corp. layers of liability mean absolutely nothing whatsoever if your involved in an accident. This is because the LLC holder person is also the one who directed, or had a direct hand or involvement in the action that resulted in the accident -- AND ALSO did not take reasonable and responsible measures to prevent it.
I.E.>
Despite what your CPA or accountant person would say or claim ... If your a one-man show ... or have a driver and team with them ... and you have direct control of where and what that truck does... or are present in the truck at the time of an accident... you have zero protections by making companies and sub-companies if you did so for liability shielding purposes. This does not hold up in court for squat when something bad happens, and is especially nulled if the person holding the LLC/corp. was the driver or co-driver.
In the chance that you have all nothing but hired drivers... if you dictate their direct route and road... You are still liable... protections are almost still nothing... it easily is argued that you (the parent company or LLC holder) directed them into that situation and are therefore responsible for whatever the driver cannot pay. It is also against employer/employee 1099 regulations to do such things too. The only protections you may remotely have is to show the pick-up locations and times, the delivery location and times... and have no other involvement whatsoever in the trucks decisions.
AND EVEN THEN ... if the driver has any kind of record, CSA points to indicate they are an unsafe driver, .. has ever failed a drug in the past without records of a rehab program to go with it (or fails drug/alch. test at time of accident) , drivers-lisc. history of unsafe driving (speeding, fines etc.) or similar etc. etc. ... and has any kind of history or record of higher than normal liability risk prior to the accident... The LLC and parent company IS STILL FULLY RESPONSIBLE for allowing the driver to operate the equipment in the first place.
just some things as an FYI on those LLC/corp. so-called "Protections" that really mostly don't actually exist these days in trucking.
Any lawyer who sues trucking companies regularly can tell you these same sort of things, it is well known. i am not a lawyer, don't claim to be .. so.... For more proper advice on this subject, I would suggest you go find one of those type of lawyers that specialize in trucking liability and protections (that sue ppl for it regularly too) and and let them know what I mentioned here. See what they say... I am only conveying it as i understood it in that conversation I had a few years back.
This leads to "Why go LLC to begin with?". That was my questions back then, so here is where I stand on it any ways ...
The way I see it, unless your making tons of moneys that you have to claim taxes on every year, and your the only one driving your truck.. or you and someone else... there is zero benefit to having your company set up as an LLC or corp. The rule of thumb I heard is that there is no tax breaks that are worth all the extra headaches and paperwork and extra tax documents every year + paying someone to keep up with it all unless you owe and are writing checks upwards of $36,000 or more directly into the IRS every year. At that point is where it starts to benefit you in tax breaks above all the headaches, costs by accountant,CPA, tax preparer, etc.. and other expenses associated by having that LLC/corp. extra layer.
This is also why my book (top of forum) does not tell ppl to become an LLC. I did not consider back then though that an LLC may be a wise choice if you live in one state (say new-jerky) with high trucking related taxes and want your trucking company listed in another state (say south-dakota) to avoid state taxes, high tag fees, high title fees, etc. - . An LLC can help someone do this more easily from what I understand.
just my thoughts.. do your own research.
RE: Leasing to yourself - smorgan87 - 01-18-2021
Agreed Rawze. I was mainly speaking as for megas with thousands of trucks, multiple corporations etc.