Purchasing company leased vehicle - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

CrazyCaper · 05-14-2009, 03:58 PM

I need some advice. I have the opportunity to purchase outright the company car I've been driving for a few months now. I can get it at a helluva deal (2006 Nissan Altima, 40K, $7500 tax in).

I really don't need this vehicle as I'm getting another one due to the lease being up on this one.

Question:

Is there a certain amount of time you have to own a vehicle before reselling? (capital gains issues)

Thanks,
CrazyCaper

flip · 05-14-2009, 04:11 PM

My banker father says you are good. No capital gains on cars. Houses, stocks etc yes but cars no.

DESS · 05-14-2009, 07:16 PM

Does it have the 3.5 liter engine?

cal_guy · 05-14-2009, 09:08 PM

Quote:

Originally Posted by flip

My banker father says you are good. No capital gains on cars. Houses, stocks etc yes but cars no.

There's usually no capital gains taxes for cars because you usually can't make a capital gain on cars (selling price greater than cost). However what can't happen is a capital loss on cars because cars are considered to be a personal use property by the CRA.

blankall · 05-14-2009, 09:23 PM

You should also be aware that if you are buying the car for less than market value, you could be taxed on a deemed benefit from your employer.

I don't have any practical experience with this, so I don't know the likelyhood of the CRA actually nailing you on this.

Shazam · 05-14-2009, 09:33 PM

I can ask my accountant tomorrow if you want.

CrazyCaper · 05-15-2009, 08:29 AM

Quote:

Originally Posted by Shazam

I can ask my accountant tomorrow if you want.

I would appreciate that. I don't want to get burned afterwards.

CrazyCaper · 05-15-2009, 08:30 AM

Quote:

Originally Posted by DESS

Does it have the 3.5 liter engine?

No. It's the 2.5 liter. Still a great car though. I get approximately 700kms/tank.

ken0042 · 05-15-2009, 08:52 AM

Quote:

Originally Posted by CrazyCaper

I get approximately 700kms/tank.

Sorry, but a huge pet peave of mine when people say stuff like that. Especially since most vehicles are designed to have a range of 600+ km per tank; meaning they make sure the tank is the appropriate size to give that kind of range.

If you want to brag about fuel economy, then use MPG or even L/100 km.

[/rant]

Shazam · 05-15-2009, 09:23 AM

So my accountant says:

Technically, if you're buying the car for "far less" than fair market value, then yes, it can be considered a taxable benefit. According to Gold Book, the FMV of a 2006 Nissan Altima 2.5 with auto is $14975. You can decide if you wish to report this or not. Most people don't.

Technically, if you sell the car for more than your purchase price, yes, it can be considered a capital gain. You can decide if you wish to report this or not. Most people don't.

FlamesKickAss · 05-15-2009, 09:51 AM

is the 7500 the buyout from the dealership though? Because then wouldnt that make a difference?

CrazyCaper · 05-15-2009, 03:41 PM

Quote:

Originally Posted by FlamesKickAss

is the 7500 the buyout from the dealership though? Because then wouldnt that make a difference?

I would be purchasing the vehicle from the leasing company, whomever that may be.

I can purchase it for $7500 but don't really have a need to keep it as I'm getting a new vehicle from my company. It just seems like too good a deal to pass up.

Log · 05-15-2009, 04:08 PM

Hell of a deal! 2.5S or 2.5SL??

CrazyCaper · 05-15-2009, 04:20 PM

Quote:

Originally Posted by Log

Hell of a deal! 2.5S or 2.5SL??

It's the 2.5S but still a great car.

FlamesKickAss · 05-15-2009, 04:24 PM

So then if its from the leasing co that shouldnt be taxed. If I buy my leased vehicle and the buyout is agreed to be 7500 but at that time the value is still 14,000 how can they tax that?

If it was bought from your company or your company is paying the difference then I could see where you would have to pay the tax on it if declared.

*I just want to say I am not an accountant or have no exact knowledge but this is what makes sense in my mind

MoneyGuy · 05-15-2009, 05:01 PM

Quote:

Originally Posted by flip

My banker father says you are good. No capital gains on cars. Houses, stocks etc yes but cars no.

Your banker father is wrong. Why would you think bankers would know this? This is an issue for an accountant or a good Certified Financial Planner such as moi.

I haven't read the whole thread but any capital asset can be subject to capital gains if sold at a profit. Cars, paintings, RVs, they're all capital assets.