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Unprecedented tax incentives means significant savings when your business leases or finances equipment in 2011.
How Your Business Benefits
The Tax Relief Act of 2010 benefits your business in two significant ways:
- IRS 179: Write off the first $500,000 in capital expenditures. 179 benefit begin to phase out at $2,000,000;
- Bonus Depreciation: For expenditures that exceed the $2,000,000 amount, 100% of the remaining equipment cost can be written-off via bonus depreciation.
Capital Lease Example: Equipment Cost $650,000
Non-Tax, Capital Lease, or Finance Agreement Benefits
With a Non-Tax, Capital Lease, or Finance Agreement, you may take advantage of Section 179 and depreciate any excess as determined by the asset depreciation schedule. Examples of a Non-Tax or Capital Lease include a $1 Buyout, Equipment Finance Agreement, and a 10% Purchase-Upon-Termination Lease.
True Lease Example: $1,000 Monthly Payment
True Lease or Tax Lease Benefits
If a lease is a True Lease or Tax Lease, the lessor retains ownership. As the lease, your business may be allowed to claim the entire amount of the monthly payment as a tax deduction. Contracts that qualify include a 10% Purchase Option and Fair Market Value Lease.
This article was contributed by Beacon Funding. To find out more information about financing your next equipment purchase, visit our website at www.hic.us under Financing section.
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This month, we will be going way down south to Sweet Home Alabama. (For all you born and breed southerners that's pronounced Alabamer.)
