How do i handle the worth of a car invested into the business by the owner?

The basis for depreciation is the lower of the vehicle's market value at the time of conversion or its adjusted basis. The adjusted basis is your original cost less any deductible casualty losses and any diesel fuel tax credit claimed plus any substantial improvements. The value of the loan is not a factor in determining the basis for depreciation.

Clients often make incorrect assumptions about business vehicle use and depreciation.Read pub 535 and explain the basic rules. http://www.irs.gov/pub/irs-pdf/p535.pdf

In order to take depreciation on an asset the business must 1, own the asset and 2, have purchased the asset... if there is a lien on the car then a bank holds title and its going to be difficult to transfer ownership without paying off the note.

Assuming that this is  a mixed use vehicle (business & personal) its probably easier to calculate business use mileage and let the business reimburse owner for the expense

Skylane - I do not believe the vehicle needs to be purchased by the business in order to be depreciated unless the business is a corporation. I believe Atlasbooksllc is an LLC, a disregarded entity. If this is a Single Member LLC then I believe he/she can take depreciation and other actual expenses or can take a standard mileage deduction without necessarily being reimbursed from the business account.

Mimbreno is correct. Any asset which is "put into use" can be depreciated from the date it is put into use. That is ANY asset that must be used to carry out the business. This can be tools, cars, office equipment, etc. The basis for depreciation is always "the lower of cost or market". "Cost" is always calculated as Membreno says - actual cash out the door, plus improvements, minus detriments, and minus elements already deducted by the business for that asset.

The "business" that puts the asset into use must "own" the item - have full control of its use. The question here is, what is the business. The business is an individual (the taxpayer), unless the business is its own entity - a corporation or partnership with more than one owner.

For a vehicle, the deduction is either mileage or costs. Costs include depreciation, insurance, repairs, fuel. Mileage more than covers all of those, in most cases. I have repeatedly done the math - mileage works better. Whichever type of cost allocation is used - it must be split between personal and business use. If it is 100% business use, cost may be better than mileage, but from what I see, it rarely is.

ProSeries will let you enter both sets of info, calculate the personal/business percentage, and chose the one that's higher. While you can switch under some conditions, you cannot go back and forth each year choosing whichever is higher. Pick one and stick with it. 

You can use Kelly Blue Book or some similar method to value the vehicle.  Since this looks like it is a Quickbooks rather than a ProSeries question, the asset would be valued at market value (as discussed above), with a credit to a liability account for any remaining loan balance on the vehicle and the remaining balance would be credited to owners equity.