Discussion:Auto owned by one S corporation but used by two S corporations.

A client has two S corporations for unrelated businesses. The first S corp has owned owns a company car for the past 4 years. He has been deducting operating expenses and depreciation. He had been using it 90&% business and 10% personal. This year he started another S corp for a totally unrelated business. However, he has used the car owned by the first corp to do some of his business, viz-a-viz making sales calls and delivering the products. His milage distribution now is 60% first S corp (owner of the car) 30% second S corp and 10% personal use. Question: How should he handle auto expenses for each of the two corporations?

Any guidance will be greatly appreciated. Thanks and Best Regards,

Jay

So, will the mileage cost be an automobile expense to the new corp?

Will this amount be reported on old corp as an income or not?

Will the old corp report its vehicle usage as 60% business and 40% personal or 90% business and 10% personal?

Thanks in advance.