Leasing AC Equipment: How to deduct monthly expenses?

[gcestaro]

I have a rental property and replaced the AC and furnace using a leasing option. It works much like a car lease in that the vendor owns the equipment and I pay monthly. A portion of the payment pays down the equipment purchase and at the end of the lease (15 years) I have to buy out the lease for the remaining amount or have them remove the equipment. Where on my taxes do I report this monthly expense?

[ThomasM125]

It sounds like you may have a conditional sales contract since you have an option to buy the equipment at some point in time. If that is the case, you would total the lease payments to determine the cost of the equipment and then add that as an asset in TurboTax. You can then deduct depreciation each year on it. You can read more about conditional sales contracts in this IRS article: Depreciate leased property