View Full Version : Tax Question
If you purchase a FFR kit, is it a tax write off?
CaptB
08-10-2022, 07:49 PM
It's a pay your tax to the state off.
Mastertech5
08-11-2022, 09:47 AM
I don't know about your or other states but in Massachusetts when you register your vehicle the sales tax is charged at the time of registration and for a "kit car" any sales tax you paid on parts is subtracted from what you might have have to pay then. That includes the sales tax on your kit. Keeps all receipts for parts you purchase!
Jhinkemeyer
08-11-2022, 10:50 AM
It's a pay your tax to the state off.
Haha, yeah that is more accurate. In IL (and perhaps others) technically you're even supposed to pay it when you bring it into the state or there are additional fines / interest / etc. that get added on if you try to pay the tax a few years later when it is road worthy and you register it.
CaptB
08-11-2022, 11:27 AM
Man I will tell you in TN, while I haven't done it yet, it does not seem like it's too hard. The hardest thing is finding a county tax office that know how to do it right. I don't think there's any inspection here either!
Haha, yeah that is more accurate. In IL (and perhaps others) technically you're even supposed to pay it when you bring it into the state or there are additional fines / interest / etc. that get added on if you try to pay the tax a few years later when it is road worthy and you register it.
There is likely a lot of variability by location and even the person doing the paperwork. My experience was that I paid state sales tax at the time I registered the car. I provided my FFR invoice and my Blueprint Engines invoice. The clerk handed the engine invoice back and said they just needed the kit invoice. That saved me nearly $700 in tax. They did, however, make me pay the personal property tax back to the original purchase date. This is a tax paid in my state each year you register a car. I argued that it couldn't be registered until it was completed, but got no relief.
rthomas98
08-11-2022, 12:10 PM
Same here I had to pay the kit tax at the time of registration here in Michigan. Luckily Blueprint charged the tax on the engine and trans so didn't need to pay for that part. But was an extra $1500 for the tax.
ggunter
08-11-2022, 12:34 PM
When you say write off do you mean tax deduction? In some states large purchases that have a large sales tax associated with it are tax deductable come tax time.
Thank you all for your comments, all are good things know.
I see now after reading my question that i didn’t really ask the right question.
Can you claim a kit car as a write off on your income tax? I know a few years ago I had purchased a new car and my accountant said that I could claim that as a write off, just curious if the same could be said for a kit car?
That’s exactly what I’m asking. Is a new kit car a tax deductible item on your income tax.
CaptB
08-11-2022, 03:55 PM
Well I suppose that if you can tie it to a business purpose then maybe. I'm no tax accountant but I did sleep in a Holiday Inn Express last night.
If you purchase a FFR kit, is it a tax write off?
Thank you all for your comments, all are good things know.
I see now after reading my question that i didn’t really ask the right question.
Can you claim a kit car as a write off on your income tax? I know a few years ago I had purchased a new car and my accountant said that I could claim that as a write off, just curious if the same could be said for a kit car?
Well, if you can figure out how to do that legally, I'll be ordering a Coupe ASAP! I'm not a tax attorney or CPA, but unless the purchase is for some non-profit, tax-exempt, etc. purpose, I can't imagine you can deduct it.
Jeff Kleiner
08-11-2022, 04:29 PM
That’s exactly what I’m asking. Is a new kit car a tax deductible item on your income tax.
My wife and I are self employed and are able to take a deduction for business miles put on our vehicles. Years ago our CPA would sometimes take a depreciation amortized over a few years for the purchase price of new vehicles that were to be used for business purposes but he now advises that we’re better off with the mileage deduction (as well as being allowed to deduct licensing and registration fees, maintenance & repairs, insurance, etc.). You can only do one or the other—-if you take depreciation you can’t take mileage & expenses and vice-versa. To the meat of your question, as has been said unless you can tie the purchase and use directly to a business it won’t be deductible.
Jeff
aquillen
08-11-2022, 07:14 PM
Write some music, sell an album, have your car on the album front. Then you can write it off... worked for ZZ Top and the "Eliminator"
Badfish
08-11-2022, 07:48 PM
…and if you’re in Connecticut, watch out for the annual property tax, varies significantly by town / corruption level. See autosig links.
racingandfishing
08-11-2022, 07:56 PM
I am by no means a tax attorney or CPA.
I can only say that in Texas we don't have a state income tax and if itemizing, we can deduct/write off the standard sales tax as well as the sales tax for a large purchase like a car, boat, rv, plane, etc. from our federal tax return. While it is not a tax credit, it does help to reduce your overall taxable income.
As far as doing this for the kit, I don't believe it qualifies until you register it, get a VIN and pay the Texas sales tax. After that, I believe you should be able to deduct/write it off.
That said, I am waiting on a qoute from Stewart and it could affect my decision to pickup or have it delivered. If I have it delivered, it defers the tax till I register it and get a VIN. At that point, I should be able to take the full deduction. If I pick up and pay the Massachusetts tax on the kit, not sure if Texas will allow me to deduct that amount when I register it. They may only allow me to deduct the difference between the two.
Maybe we have a tax attorney or CPA on here who will see this thread and give advise!
Alan_C
08-11-2022, 08:01 PM
I you have your own business and can show the purchase is in someway business related, like to be used in advertising, maybe.
Thank you all for your comments, all are good things know.
I see now after reading my question that i didn’t really ask the right question.
Can you claim a kit car as a write off on your income tax? I know a few years ago I had purchased a new car and my accountant said that I could claim that as a write off, just curious if the same could be said for a kit car?
Considering Joe is hiring another 87,000 IRS agents to audit people I would definitely consult with your accountant and not a car forum to you get your answer.
Apologies for the delayed response. Thank you for your feedback and that answered my question. I too, am a fellow Texan.