qbteachmt
Level 15

Let's take this a bit at a time:

"My client owns 2 businesses. One a c Corp and the other a llc partnership."

I'd like to help and help him and you understand this differently. He owns Shares of a C Corp, no differently than buying MG or Ford or Tesla. He also might be an employee of that corporation, which the Supreme Court tells us is its own Entity. He is not "the owner." He might be the only Shareholder. He might be CEO or President, as well. He still is John Doe, person, too.

"He used the business credit of the c Corp"

And this is where the issue lays, because the C Corp is not his personal bank. This is like him asking if you will stand behind (co-sign) a loan or buy a vehicle for him. Same thing = C Corp involved is the same as a Loving Stranger involved. You know him and trust him and like him, but he is not you.

"to purchase a vehicle for the LLC. So the vehicle is in the c Corp name"

Then he is getting the use of a Corporate Asset personally = taxable fringe benefit that is supposed to be run through Payroll.

"and my client's name"

The title should be in the C Corp only. Ford would not allow me, as a shareholder, to put myself on the title of their property, too. He doesn't understand "running" a corporation and "piercing the corporate veil." Example of what he just did: if there is a horrendous vehicle accident, he is now personally liable, because he owns the vehicle with the C Corp.

"both are responsible for the vehicle loan"

He signed the note Twice, as each personage? Smart salesman; now he has twice the recourse for payment of that loan. Your client didn't need to do that 🙂

"The LLC uses the vehicle 100% no personal us of vehicle (truck)."

Yes, it's All Personal, if you want to state the C Corp owns the vehicle and it is not in use for the C Corp.

Does that help?

"The c Corp doesn't use the vehicle." <== There, you stated it, again

"The LLC pays the loan and vehicle repairs and maintenance."

The LLC isn't on the title or the loan.

"Does the c Corp get the depreciation? since the vehicle is in its name and the LLC recorded the actual expenses paid and not the depreciation? Or does the c Corp not report and depreciation?"

I would direct you to local mentoring. Your client has had some bad guidance to now, and it seems like something that needs to be unraveled, and dealt with. Including: Ownership title, loan, payroll, perhaps a lease/rental agreement between the C Corp and the LLC, insurance, etc.

 

This is a bit of a mess and is beyond a ProConnect usage question. Until you have all those answers, you cannot put anything anywhere.

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