Lease Or Buy: 2021 Porsche 911 C4S Cab

$3.13/mile seems a bit salty for a lease, but I’m driving a car half as expensive at $ 0.60/mile so what do I know?

I just spit of out my coffee at this :joy:

Just curious… are Porsche
Financial Service lease’s transferable?

I would certainly want to have the ability to transfer this lease…

1 Like

Yes! 7,500 my mistake

You are correct, definitely not all but some percentage. Maybe 50-75%? Anyone have reliable knowledge on this? I’d have to get more clarity on that but from a few people I’ve spoken to it is common amongst business owners

Still figuring it all out but somehow it seems to get more complicating rather than less.

1 Like

I don’t know your tax bracket, but if you could write off $30k, the lease seems to make sense.

What business purpose does the vehicle serve? How often do you drive it for business vs for personal use?

A friend of mine got audited and only issue auditor found was his high percentage tax deduction for his Cayenne lease.

There’s probably some script which auto-flags any tax return with a Porsche lease deduction as an audit :grin:

This is more or less the answer any tax professional will tell you - you’d definitely want to talk it out with your accountant to see how the numbers work out over the entire loan/lease period. The difference really is on a lease you can write off the lease payments, but you can not depreciate the vehicle (since it’s not yours and all). When you purchase, you can write off the interest on the loan and then you can also depreciate the vehicle. When you consider the loss in value (as someone pointed out above, if there’s an 18k difference of ‘value’, then you need to make that up in taxable gain) it’s not always more beneficial to lease. There is generally a better write off for leased vehicles than purchased due to payment vs depreciation.

On a high value vehicle lease, there is something called income inclusion that is required - basically you have to add income for the year based on the value of the leased vehicles capitalized cost - At $151,000 - according to the IRS Table (look up Sec 1.280F-7 if you want to see the table), year 1 you add $1,977 income, year 2 is $4,321, year 3 is $6,406 - effectively you’re adding $12,000 in income due to the high value lease over the life of the lease which severely degrades the value of the lease write off (they did this on purpose to even the playing field for lease payment write off and depreciation)

If you do purchase, also keep in mind that when you depreciate you may end up with a taxable gain when you sell the vehicle, if you depreciate $50k and sell for $110k, you need to pay taxes on that $10k difference.

There’s a lot to think about for taxes on business deductions, definitely make sure you have a pro tax person and not the H&R Block guy, they’ll get you in a world of trouble quickly.

5 Likes

This is the detailed reply I started and failed 3x - thank you.

There is a difference between “a tax person told me leases are deductible”, and Nick (my CPA for the last 10 years) texting me “you can deduct up to $1000/mo on a lease, but don’t get a sports car” (totally made-up).

What a great response. I really appreciate the way you broke it down. You covered a lot of variables.

I spoke to a couple of experienced CPAs and a couple of people that have bought/leased Porsches over the years. I’ve had mixed answers ranging from Lease is better, buy it, and it really doesn’t make too much difference. The latter opinion was actually made by an experienced CPA.

Nice job, I only had “depreciation” and “interest expense deduction” :slight_smile:

This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.