Tax treatment of co-ownership

Default treatment: personal-use expense

RYDA co-ownership is structured as a personal-use luxury product. Cars are depreciating consumption goods, like a country-club membership or a jet card. Under IRS rules (Pub. 946 / IRC §280F), members generally cannot deduct depreciation on luxury vehicles used for personal access, because the asset is not in business or income-producing use.

What you'll receive

• Annual statement summarizing your contributions, fees paid, and usage for the year.
• Member directory entries for each LLC you co-own (LLC records).
• If applicable, a state sales/use tax statement on your buy-in (varies by state).
• If the LLC has incidental rental income (e.g., off-utilized days rented to non-members), an informational K-1 reflecting your pro-rata share. Most members will not have this.

Sales and use tax

Vehicle purchases and some inter-member transfers may be subject to state sales/use tax. Florida is 6%; California is ~7.25%; New York varies by county. RYDA collects and remits where required. Your annual statement will reflect anything paid on your behalf.

If you use the vehicle for actual business

Members who use a co-owned vehicle for genuine business purposes may have different treatment, including potential deductibility of operating costs allocable to business mileage. This requires recordkeeping that goes beyond what RYDA's normal reporting captures. Talk to your CPA before relying on it.