A business is deciding between leasing equipment and purchasing it outright. From a capital allowance perspective, which analysis is most useful when evaluating the after-tax benefit of purchasing?

Question

A  business   is   deciding   between   leasing   equipment   and   purchasing   it   outright.   From   a   capital   allowance   perspective,   which   analysis   is   most   useful   when   evaluating   the   after-tax   benefit   of   purchasing?

Accepted Answer

Assess   whether   the   taxpayer   will   own   a   qualifying   capital   asset   and   therefore   gain   access   to   allowances   that   may   reduce   taxable   income   over   time

Answer

Compare   only   the   accounting   depreciation   charge   to   the   lease   rental

Answer

Ignore   ownership   and   focus   only   on   monthly   cash   flow

Answer

Focus   only   on   whether   the   asset   is   insured

Crowdly

A business is deciding between leasing equipment and purchasing ...

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