Kerry M. Kerstetter, CPA (referred to as The Tax Guru by other CPAs around the country) helps capitalists, investors & small business owners win the tax game. See www.TaxGuru.org for much more detailed info.
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Tax Guru-Ker$tetter Letter
Tuesday, September 11, 2007
Buy vs. Lease
Q:
Subject: Buy vs. Lease AnalysisKerry,I'm in the equipment leasing business and am constantly running up against our lease programs being compared to traditional bank financing. I believe leasing to be a better option in most cases because of banks "compensating balance" requirements and the fact that they usually place "blanket liens". In addition, Section 179 write-off vs MACRS depreciation also has real financial advantages. However many customers fail to take this into consideration, and instead focus solely on "interest rate".Have you ever put together a Buy vs Lease analysis template which could show the real after-tax cost of leasing vs traditional bank financing which will move the focus off of what banks are selling....interest rate...and give me real numbers instead of me attempting to explain the differences over the phone?
A:
I haven't designed my own such template because there are so many already available on the net for free, such as this one.
I haven't tested this one out for accuracy in real life situations, so you may want to run some tests before recommending it to your clients.
Good luck.
Kerry
Labels: Leasing
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 9/11/2007 12:18:00 PM Send this post:
