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Old 12-10-2011, 09:18 PM
twward twward is offline
LawnSite Member
Join Date: Dec 2008
Location: New Bern, NC
Posts: 51
A true lease has a predetermined residual at end of the term. The benefit of a "true" lease is the monthly payment is considered a rent payment and is 100% expensed. Also, you get the "useful" life out of the piece of equipment. Do you really want to own an old, worn out mower that is just going to sit around once it is finally paid off? Or, would you rather have a consistent monthly payment so that you can have peace of mind about your equipment and also so that you can budget and plan future expenditures.

The lease with a "dollar buy-out" and the lease that you own the equipment at the end is not a true lease. Alot of these types of leases are now outlawed in some states. With these two leases, you generally do not get the tax advantages.

Having been involved with the financing and leasing of compact equipment, I can honestly say purchasing vs. leasing is something that you should talk about with your CPA.
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