Posted on June 01, 2006 at 16:52:05:
Does your company lease some of its equipment or its real estate? About 8 out of 10 companies do. If it’s your business, consider leasing the equipment or real estate yourself.
There are a number of advantages. First, it protects the equipment from business creditors. Also, leasing provides a tax deduction for the primary business – and a good financing arrangement.
There are estate tax opportunities, too. Instead of owning the equipment or real estate yourself, consider setting up an LLC or trust to own the property, gifting interests in the LLC or trust to family members, presumably those in lower tax brackets. The net leasing income goes to owners of the LLC or trust. If, in time, the property is sold, any gains are taxable to individuals rather than to the company and then to it shareholders.
Of course, any leasing arrangements must be carefully structured to meet tax rules. Let a professional set up the leasing deal.