10/17/2026
You didn’t sell your truck. So why is there a $30,000 gain on your tax return?
S-corp owners, this is where “I already wrote it off” can get expensive.
Your S-corp buys a truck for $30,000 and fully writes it off using bonus depreciation. Later, you transfer that truck out of the business to yourself personally.
Same truck. Same driveway. Different tax consequences.
That write-off reduced the truck’s tax basis to $0. If it’s still worth $30,000 when the S-corp distributes it to you, the business generally recognizes a $30,000 taxable gain—as though it sold the truck at market value.
That gain generally passes through to your personal tax return, even though nobody handed you a check.
And yes, depreciation recapture can mean that gain is taxed as ordinary income.
If you own a service business taxed as an S-corp, your business vehicle tax planning needs to cover what happens AFTER the write-off, too.
Before transferring a vehicle or equipment out of your S-corp, have your tax professional run the numbers.
Save this before your next “I’ll just put it in my name” decision.
Follow me for practical small business tax planning that looks beyond this year’s deduction.
