Transferring the partly depreciate auto to an S Corporation

Assets of an S-Corp are depreciated on the owner's schedule. So, you just continue to depreciate the asset on your return (short and uncomplicated version).

I think the bigger question is, how can you be an officer of the (S) corporation using the vehicle exclusively for business and not be an employee? Owners with any active participation are required to take reasonable salaries, and are therefore employees. This is so that owners would not just work and declare all income as corporate income (not subect to SI tax).

If someone helped you convert a sole proprietership to an S-Corp and then told you not to be an employee with wages, even though you are actively participating, you have received some bad advice. Only passive owners of an S-Corp would not be conisdered employees. So, by stating that your personal vehicle is used by you exclusively for business, indicates that you are more than a passive owner. If you ever went through an audit, this would be a serious issue. However, what is a reasonable salary is a little more subjective.

You should get some professional advice on this.. Anyone else?

I was not sure on not being an employee when I was about to start the corporation as well. So, I did go to the local chamber with my business plan and discussed with a retired CPA arranged through SBA. Since, my investment is not that big, and intially I might not get any income out of it, I just wanted to make sure the corporation has some money left to run the day to day oeprations instead of draining all the capital in salaries. He said, it should be okay if it doesn't hire any employees. So, I thought I can treat all the work as sweat equity instead of taking salary for it and leave whatever little the corporation makes in the intial period in the corporation itself so it has some more capital. Is that okay?

If you are an S-Corp, you are the corporation, so there is no leaving it in the corporation. All profits are passed on to the shareholders. If the amount is immaterial and/or there is no income, then you could probably get away with that? But I am not sure as I don't do tax work.