Great
@Mike9241 wrote:
the other things 1) will there be a profit over the terms of the leases - if not, hobby loss rules would apply which could result in the income being taxable but no deductions or 2) the activity would be reported on schedule C and profit is subject to self-employment taxes
The rental of personal property is subject to self-employment tax if it is classified as a business activity. This classification is determined by the continuity and regularity of the rental activity.
Great point - it appears yes, according to their pitch, the rental of the equipment will generate income, 90% of which will be used to pay the loan, 10% becomes income that you will report and pay taxes on.
At the end of 6 years the equipment is bought back at about 50% of the original price, I guess this becomes residual value income (?) and subject to depreciation recapture and one has to pay taxes at the time at regular income tax rates (or capital gains rate?). I wish there was a nice way to model the cashflows on a worksheet or something to get the whole picture.
Anything else I should ask? Anything else I may be missing?
