Leasing is a SMART ALTERNATIVE TO CASH!!!
TEAM Equipment Leasing, Inc. has innovated a truly unique lease document that will enable your company to save real tax dollars. It's called a "Rental Agreement".
Rule: in order for a lease payment to be tax deductible, you cannot have a "bargain purchase option" such as a $1.00 buy out. If you have a 10% Purchase Option or NO stated purchase option, then it may be an operating expense and 100% tax-deductible.
Problem: Most leasing companies assume that there is no residual value in certain assets such as Software and Signage; therefore common sense dictates that we write leases with a $1.00 buy out on these kinds of assets.
Solution: Obtain a low lease payment using the $1.00 buy out pricing. TEAM will write the lease using our new "Rental Agreement". The Rental Agreement will have no Purchase Option stated. By doing so, your company can expense their lease payment as an "operating expense". When the lease term is over, TEAM will not pursue for any further "rental payments".
Cash Sale
If a company is paying cash, the company must use LIQUID Cash and convert it to a FIXED Asset. They lose the opportunity cost of tying up cash in their equipment purchase. This is NOT even considering their internal cost of funds.
Lease Sale
TEAM's innovative Tax Lease allows
you to expense 100% of each monthly payment. This benefit means real tax savings
to your company.
1. Selling Price $10,000.00 - Assume Company's tax bracket is 33%.
2. 36 Month Payment = $362 (w/ no purchase option)
3. Tax Savings = $362 x 33% = $119.46
4. Net payment = $362 - $119.46 = $242.54
5. Net cost of equipment = $242.54 x 36 months = $8731.44 for a $10,000 asset.
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