Congratulations on the new venture! Before we tackle the tax deduction question, there are a few things to keep in mind.

Accounting For the Loan & Interest
First, for accounting purposes, the start-up costs should have a due to shareholder journal entry for the the personal funds used to finance the vehicle. In addition, the loan will have to accrue interest. That interest is due to you and the corporation needs to issue a 1099-INT for any interest that accrues and is paid to the debt holder (you) which exceeds $10.

Transfer Title to Business
Secondly, you need to transfer title of the vehicle to the business if you haven’t already done so.

Thirdly, given the limited information, it is very difficult to provide an exact answer regarding the tax deduction amount for your vehicle. However, below is some general guidance regarding start-up costs and tax deductions.

Start-up Costs Deductible Up to $5,000
Generally speaking, business start-up costs prior to incorporation can be deducted up to $5,000. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized. So, in your case, if the vehicle is in fact used solely for business purposes it would appear as though you would be able to deduct those start-up costs up to $5,000 in the year incurred. Any amount of costs thereafter would be amortized.

Vehicle amortization can vary so more information is need to provide further detail.

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