"Small Business Equipment Leasing Is The New Line Of Credit Financing For 2009"

Can I write off leased equipment?

Small business here. I may have a big gain coming on the sale of a part of my business. Potentially looking to offset some of the gain by writing off some old equipment that is still in use. All of the old equipment is leased. Accounting wise, can I write off leased equipment? If I write it off as a loss, do I have to early term the equipment with the lessor. Does any of this change if the equipment is still in use after the write off?

Thanks

 Mail this postStumbleUpon It!

Technorati Tags: ,

August 12, 2009 | Filed Under Equipment Leasing Questions 

comments

4 Responses to “Can I write off leased equipment?”

  1. GIGGLES on August 12th, 2009

    no. the lessor writes it off, silly.

  2. Elliott J on August 12th, 2009

    Possibly. You can usually write down (depreciate) certain improvement items and capital items on a progressive 5 year basis. There are offsets with cap. gains, receivables, etc.

    Glad to hear that you are taking your business seriously. Consult a small business accountant!

  3. duckdad on August 12th, 2009

    You can write off office equipment as an operating expense if it is a "true" lease, such as a "Fair Market Value" lease for as long as you’re making the payments.

    If it’s a "capital" lease, where you own the equipment at the end without a payoff, then you have to amortize & depreciate.

    Once the lease is up, if you exercise your buyout option, then you can write off a percentage of the depreciated value.

    Check with a local CPA though. some little details on this differ from state to state.

  4. Other Guy on August 12th, 2009

    The equipment is not yours to write off assuming it is an operating lease. Typically copiers and the like usually are. Theoretically, you still owe the leases. You do not have title, you cannot transfer their ownership to another party. You would either have to buy out your lease or cancel your lease. I guess then it depends on what your leases say and what was negotiated in the sale of that part of your business.

    I am not a tax accountant so I do not know the tax ramifications of this transaction.

Leave a Reply




Powered by Yahoo! Answers