Legal Question in Tax Law in California

Using a second LLC for tax advantages and to shield assets

Let's say I have a home-based business where I will need a vehicle to visit clients. Would it make sense to create a second LLC for the purpose of procuring capital and equipment, use that LLC to purchase a vehicle that I then lease to my home-based business for ''business use and reasonable personal use.'' My thought is that doing so will (1) allow the entire vehicle purchase to be written off for tax purposes, (2) shield the vehicle from being an asset on the home-based business's books in the event of a lawsuit, and (3) allow the vehicle to be used for reasonable personal use and still write off the entire cost of leasing it from the 2nd LLC. Is this correct? Am I making this too complicated? Thanks for any input.


Asked on 6/24/08, 3:40 pm

1 Answer from Attorneys
Mark Muntean Mark Muntean, Attorney at Law

Re: Using a second LLC for tax advantages and to shield assets

If these are both single member LLCs you will gain nothing since both would be considered disregarded entities. For federal and state tax purposes you will be considered as the owner of the assests of both businesses any merely leasing to yourself.

Read more
Answered on 6/25/08, 5:59 pm


Related Questions & Answers

More Tax and Taxation Law questions and answers in California