buying your own truck
(Edmonton, Alberta, Canada)
I want to sell my truck to my company. Only issue is I still have a 25000 loan on the truck, and the fair market value is around 22000. Any ideas on how I go about doing this? Does the loan need to be paid off before I can buy my vehicle?
You're going to sell your truck to your company for the $25,000?
One way to do it is to take out a company loan of $25,000 and pay this to yourself to pay off your personal truck loan, and change the title of the vehicle into the company's name. Then the company pays the bank each month. You personally have no more ownership of or liability from the truck.
You would post a Note Payable-Truck Loan of $25,000 and post to an asset account, Vehicles, of the same amount.
If it's not imperative that the truck be in the name of the company, you can leave things as is, and just put the purchase on paper. I mean, if no money is changing hands, you would post the $25,000 to a Note Payable-Owner (your company would pay you each month) and $25,000 to an asset account, call it Vehicles generally or Ford Truck specifically or whatever. I'm using the $25,000 because that's what you had to pay to get the vehicle. I would primarily be concerned with fair market value when you sell an asset.
You should draw up a note from the company to yourself to back up the purchase, then each month make payments to yourself equal to your truck loan payment.
I hope that helps.
Good luck! If you need anything else, just let me know. I'm glad to help.