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Level 1
posted Nov 21, 2019 4:21:12 PM

Leased equipment with option to purchase

I am leasing a gooseneck trailer for my business. I have the option to buy it after 22 months. Do I depreciate this equipment or can I deduct my monthly lease payments? 

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1 Best answer
Level 15
Nov 21, 2019 4:30:33 PM

@lan76 wrote:

I am leasing a gooseneck trailer for my business. I have the option to buy it after 22 months. Do I depreciate this equipment or can I deduct my monthly lease payments? 

Deduct the monthly lease payments. To claim depreciation, you usually must be the owner of the property. 

 

See https://www.irs.gov/publications/p946#en_US_2018_publink1000107299

2 Replies
Level 15
Nov 21, 2019 4:30:33 PM

@lan76 wrote:

I am leasing a gooseneck trailer for my business. I have the option to buy it after 22 months. Do I depreciate this equipment or can I deduct my monthly lease payments? 

Deduct the monthly lease payments. To claim depreciation, you usually must be the owner of the property. 

 

See https://www.irs.gov/publications/p946#en_US_2018_publink1000107299

Level 1
Nov 21, 2019 4:39:42 PM

Thank you.