Buy Assets Personally or Through a Corporation?

It seems like a simple decision. You need a new truck for your business. Do you buy it personally and charge the company mileage, or do you have the corporation purchase it directly?

This article investigates the idea of buying assets personally or through your corporation.

The answer affects more than just bookkeeping. Here’s a case study.

A Case Study: The “Simple” Truck Purchase

“Sarah” owns an incorporated landscaping company in Alberta. She needed a new $75,000 truck used primarily for work.

To keep things simple, she purchased the truck personally. Her corporation reimbursed her for fuel and repairs, but she didn’t consistently track mileage.

At tax time, a few issues surfaced:

• Because the truck was personally owned, the corporation couldn’t claim full Capital Cost Allowance (CCA).

• Mileage logs were incomplete, limiting deductible expenses.

• Personal use vs. business use wasn’t clearly documented.

• Insurance coverage raised questions about whether the vehicle was properly insured for commercial use.

None of this was catastrophic. But it resulted in:

• Lost deductions

• Extra accounting time

• Stress during year-end

Had the corporation purchased the truck instead, the deductions would have been clearer, usage easier to track, and the structure cleaner.

On the other hand, if Sarah had used the truck only occasionally for business, personal ownership with mileage reimbursement might have been the better approach.

What This Teaches

When deciding who should own an asset, consider:

1. Percentage of Business Use—High business use often favours corporate ownership.

2. Documentation Requirements—Personal ownership requires careful mileage tracking to support deductions.

3. Tax Treatment—Corporate ownership allows CCA claims, but personal use may create a taxable shareholder benefit.

4. Risk and Insurance—Commercial use needs proper coverage, regardless of who owns the vehicle.

Here is a video exploring some of these points further. 

The Bigger Point 

Ownership decisions aren’t just about “who pays.” They affect deductions, reporting requirements, and potential CRA scrutiny.

Before purchasing significant assets (vehicles, equipment, or property) it’s worth having a brief conversation with your accountant. A small structural decision today can either simplify your bookkeeping for years… or quietly complicate it. Shaw & Associates would love to have these conversations with you.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.