Leasing is not a bad thing, depends on how quickly the asset will depreciate. I wouldn't buy a brand new Aston or Mclaren. If the money factor is very low then you're better off keeping your cash and investing on your own. My .02. Ferraris tend to hold their value but if you don't want to take the risk, don't.
In regards to my post it is just simply tax strategy. I haven't even mention about where you COULD take the money and do other things with which btw could be B.S. and high risk to play with but doesn't mean it can't be done. I'm just simply sharing my view coming from a situation that our taxes play a MAJOR role in our decisions. i never just went straight to the dealer and go ,,oh yeah i'm gonna get this or that car and just do it without a plan. In 3 cases of having these exotic cars I usually sat down with my Corporate Accountant and go over the scenario and numbers responsibly. Also I'm contributing to the forum based on the real life FACTS not some mumble jumble info from people who haven't done it or afraid to do it because they are biased due to their misinformed the idea is share my experience for anyone reading it and they can make their own decision. Hope that make sense.
Well then, why not lease a used LaFerrari or f12tdf or upcoming aston-red bull hyper car , bigger tax deductions and it might even continue to go up in value. I know people that buy cars through their Montana llc to avoid the sales tax, but still they don't write off any exotic car as a business expense.
Depending on how long you're going to keep the car, you save a little money by leasing to avoid sales tax, when the interest paid exceeds the taxes, you're upside down....plus you do keep your capital free IF that's a concern. For "regular" cars (eg. BMW's) the subsidized manufacturer leases can be good deals, in as much as you're essentially renting the car, warranty and all, and don't have any hassles at turn in. Of course, even the subsided leases get you with low residual amounts. FWIW, FFS did a lease program on the Cali with a very low interest rate. As for TAX deductions....don't get me started. Take a look at the multiple Montana LLC threads here. For most, it's a good deal until it stops....most state and local jurisdictions are on to that, at least in the northeast. It starts with you having a DMV registration issue, then evolves into a property tax issue, then it rolls on from there (i.e. hmm, what else is he hiding?). In California, the CHP has a website for people to turn in their neighbors. My accountant (California based) absolutely lets me "write off" business expenses for vehicles, but the FTB and IRS are using analytics to sniff things out, and unless you're in the exotic car business, or make aftermarket parts, you're going to have issues. Of course, you can structure your employment contract to provide you with an exotic company car, but then make sure you are paying tax on these "compensatory perks".... a few years back there was a bit of an uproar when part time/hobby real estate agents started trying to justify Range Rovers. The government cannot tell you what car to buy, or whether you use a Huracan to deliver Domino's pizza, but they can make your life miserable. Any Uber drivers on here? that would an interesting (new) case study
Haven't leased a Ferrari, but have leased 996TT, 997 and a 997TT through my practice. My acct is also conservative and the mileage was carefully itemized between business use and personal use. My acct always swayed me towards leasing as opposed to financing (through the practice). He also told me that the only TRUE lease that the IRS recognizes is the close ended as opposed to the open ended lease. Maybe things have changed though.
Have been told the same. An "open ended lease" is really a finance agreement with a balloon note attached, albeit with a definitive residual amount. Theoretically if you over-depreciate the car, if you end up selling it for more at the end, you need to pay tax on the upside.
I thought owning a Ferrari is about driving and SOLEY DRIVING!!??? Not POSING? Explain yourself playa!
You and I are of the same thinking. I just lease my BMW from FS, deduct what I deduct and move on. When it comes to Ferraris I said, How much? I went to the bank, asked the clerk for a cashiers check, and handed the dealer the check for everything with tax, title and fees on one small piece of paper.
