Can I sell a drone to my own business, using money that I personally loaned to the business?
Good afternoon, I would like to sell a drone that I purchased personally this year to my business. I want to create a loan agreement and loan the money from me personally to my business. I then want my business to pay me back for the drone loan immediately because it's a new business and I think it's going to take a while to get paid back from revenue generated from the business. As long as I create the correct documents like a loan agreement and bill of sale—is this ok?
19
7
Solved
How to Structure the Transaction
Since you personally own the drone and want to sell it to your business, here’s a simple structure that can work:
- Bill of Sale – This shows the transfer of ownership from you to your business. Include the make, model, serial number, purchase price, and date.
- Loan Agreement – This reflects that the business is borrowing money from you to buy the drone. It should include the loan amount, repayment terms, interest (if any), and a repayment date—even if it’s immediate.
- Repayment – Your business repays you under the terms of the loan. Since you plan to be paid back right away, just make sure the money flow matches what’s written in the agreement.
Tax Considerations
From a tax standpoint:
- Your business can deduct the cost of the drone as a business expense, assuming it’s used for business (26 USC 167(a)).
- You may owe capital gains or loss reporting if the drone appreciated or depreciated in value—but since it’s new and used personally, it’s likely a simple transaction.
- The IRS may scrutinize “self-dealing” transactions, so keeping clear documentation helps demonstrate this was a legitimate arms-length sale.
Final Tip
Keep personal and business bank accounts separate. The business should write a check or make a direct transfer to you so the paper trail is clear.
0
Loan Agreement Template
Create Document
Full Conversation
Good afternoon, I would like to sell a drone that I purchased personally this year to my business. I want to create a loan agreement and loan the money from me personally to my business. I then want my business to pay me back for the drone loan immediately because it's a new business and I think it's going to take a while to get paid back from revenue generated from the business. As long as I create the correct documents like a loan agreement and bill of sale—is this ok?
Lexi, Chatbot
Thank you for sharing your situation. Have you consulted with a Corporate Lawyer before regarding loans between yourself and your business?
I have not and I haven't asked my accountant but I did something similar with a vehicle that I owned last year but there was no transfer of money.
Lexi, Chatbot
Are you looking to ensure that the loan agreement and bill of sale are legally sound and protect your interests in this transaction?
I think I'm just looking to make sure that the process is correct and is ok from a tax perspective.
Lexi, Chatbot
Is there anything else the Corporate Lawyer should know before I connect you? Rest assured they'll be able to help with your loan agreement.
How much additional cost is it to consult the attorney please?
Ok great. Thanks.
Gurney P
Welcome and thank you for using AskaLawyer. My name is Gurney, and I'm the attorney who will be assisting with your question.
Gurney P
Are there any other assets or loans between you and your business that we should be aware of to avoid potential conflicts?
Hi Gurney, nice to meet you. No sir, there are no other loans currently.
Gurney P
Ok, thank you for clarifying. It sounds like you’re trying to set up a clean and proper transaction between yourself and your business, which is smart—especially when it comes to documentation and tax reporting.
Gurney P
How to Structure the Transaction
Since you personally own the drone and want to sell it to your business, here’s a simple structure that can work:
- Bill of Sale – This shows the transfer of ownership from you to your business. Include the make, model, serial number, purchase price, and date.
- Loan Agreement – This reflects that the business is borrowing money from you to buy the drone. It should include the loan amount, repayment terms, interest (if any), and a repayment date—even if it’s immediate.
- Repayment – Your business repays you under the terms of the loan. Since you plan to be paid back right away, just make sure the money flow matches what’s written in the agreement.
Tax Considerations
From a tax standpoint:
- Your business can deduct the cost of the drone as a business expense, assuming it’s used for business (26 USC 167(a)).
- You may owe capital gains or loss reporting if the drone appreciated or depreciated in value—but since it’s new and used personally, it’s likely a simple transaction.
- The IRS may scrutinize “self-dealing” transactions, so keeping clear documentation helps demonstrate this was a legitimate arms-length sale.
Final Tip
Keep personal and business bank accounts separate. The business should write a check or make a direct transfer to you so the paper trail is clear.
Gurney P
Does that help with your next steps?
OK, great, so sounds like I'm on the right track. Can a direct transfer from personal to business be sufficient or do I need to use a check? Separate accounts of course.
Gurney P
Exactly, you're on the right track. And that direct transfer should be no problem.
Awesome Gurney thank you. Hope you have a great Sunday Sir.
Gurney P
So far so good over here! I’m glad that helps. Was there anything else on your mind too? I'll be happy to help more.
No sir, I think you've been a great help. That's all for now. Looking forward to using your services again in the future.
Gurney P
13,616 satisfied customers
5 lawyers online now
13
3
Answered 3 days ago
Disclaimer
By messaging AskaLawyer.com, you agree to our Terms and have read our Privacy Policy.
The information provided on AskaLawyer.com is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the information presented, we make no guarantees regarding its completeness or applicability to your specific circumstances.
Use of this website does not create an attorney-client relationship between you and AskaLawyer.com or any of its attorneys. Communications through this website, including any responses from attorneys, are not privileged or confidential. For advice tailored to your individual situation, we recommend consulting a licensed attorney in your jurisdiction.
AskaLawyer.com disclaims any liability for actions taken or not taken based on the content of this site. We are not responsible for any third-party content that may be accessed through this website. Reliance on any information provided herein is solely at your own risk.
