Business Car Lease - business deduction limitation and employee increase in income?

Question

My wife and I own a California C-corp and recently leased a new passenger car valued at $40000. Assuming I started leasing for 3 years starting October 1, 90% business use, my understanding is that the business will have a reduction in deduction (by an inclusion amount). How should inclusion amount and the 10% personal use be accounted for on the employee side? Any other California-specific issues?

Also, we are already writing the expenses of another business-purchased vehicle at 100% business. We also have a personal car. Assuming there is reason to have 2 business cars, would this become a red flag (100% for one business car (fully paid for), 90% for the leased business one)?

Answer 1

Best Answer - Chosen by Voters

Financed cars is more expensive to insurance cause it requires full coverage. You can compare how much you would pay for full coverage of this car using this tool - carquotes.fateback.com

Answer 2

No red flag, unless there is only 1 owner with no employees.

Answer 3

there are limitations for luxury vehicles