True Lease

For tax purposes, a 'True Lease' (tax lease) is just that. The IRS in its Code and Rulings has set out guidelines on how to structure a lease for TAX purposes. The advantage is that if structured correctly, the entire monthly payment is expensed as a rental expense.

Operating Lease

For financial statement purposes an Operating Lease is structured to be consistent with accounting principles defined by the Financial Accounting Standards Board. These transactions keep equipment debt and ownership off of a company's balance sheet.

Capital Lease

Again for financial statement purposes, a Capital Lease is the opposite of an Operating Lease. It is structured to be consistent with accounting principles defined by the Financial Accounting Standards Board but unlike the Operating Lease, equipment debt and ownership do appear on the balance sheet.

Hybrid Leases

There are many hybrids, the most popular is a simple lease transaction with a $1.00 residual. Equipment titles pass to the lessee after the scheduled payments + $1.00 is paid.

Finance and leasing professionals understand the role that tax and accounting have on all parties to a transaction. We will structure any type of transaction requested and then some more you may not have thought of. Call us at 425-451-8933 today and ask for advice.