Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Section 179 and Leasing

Posted by taxguru on June 23, 2007

Q:

Subject: Section 179 relative to equipment leasing

Can the taxpayer benefit from the section 179 deductions if the equipment is financed?

Thanks,

Just reviewed your comments about equipment leases relative to operating leases

 

A:

If equipment is actually purchased, how it is paid for (cash or loan) is irrelevant. 

With leases, it’s a little trickier.  Capital leases (aka disguised purchases) can often qualify for Sec. 179, while operating leases don’t.

I’ve covered this issue rather extensively on my Section 179 page.

Kerry Kerstetter

Follow-Up:

Thanks Kerry,

I did review your comments on operating leases.

Very informative and useful to our customers!

Thanks again,

 

 

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