In what name should I acquire a loan for my business vehicle if I’m married filing jointly?

by Jennifer L. Romberger, CPA | Aug 07, 2018

I am trying to purchase a business vehicle that weighs more than 6,000 lbs. to get the Section 179 write-off for my business income. I'm confused when it comes to the specifics of the auto loan. I am a sole proprietor, and I do not have an employer identification number (EIN). What I am reading online is that the loan must be done in the business name (I do have a business name, but not an EIN). So, do I attempt an auto loan with my Social Security number and the business name, or just my name? Also, we were planning to do the loan in my husband's name since he has better credit than I do. Is that going to be okay since we file our taxes jointly? Do I have to make the loan in my name, or can I just later register the vehicle in my name or business name?

As a sole proprietor, the purchase agreement/document for the business vehicle should be in your name or the business name. Either way it’s connected to your Social Security number since your business doesn’t have an EIN. Regarding the loan, if it is worth the effort, your husband could take out the loan, and then you’d have to paper a loan agreement between your business and him indicating that the loan has been assigned/assumed by your business, so to speak. Then, make the loan payments out of your business account so that you have the substance as well as the form of the transactions documented.

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Answered by: Jennifer L. Romberger, CPA, EA, is with Long Financial Group Inc. in Blue Bell, Pa.

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