There are some additional details that are pertinent to this situation which will explain why I am asking about this. In the contract for the lease, after the initial 5 year term the payer has extended the option to purchase the equipment for the full amount that I paid for the equipment. However, if I continue for subsequent lease terms (5 years each), that option is no longer on the table and I would be lucky to receive MAYBE 50% of the original purchase price if I sold the equipment. The reason they are putting this option in the contract is because the company expects to be bought out by another company within 5 years and is doing this to protect me as an investor. So, with this additional information in mind, if I allowed the payer to buy the equipment for my original full purchase price at the end of the initial lease term (or the company is bought out and they fulfill the terms of the lease agreement), would I have to pay back any depreciation I deducted over that 5 year period? Are there any other things to consider in this type of situation?
