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What are the pros and cons of each? I've also been told to never pay such a large purchase with cash, always make payments as liquid assets are more valuable. What's the real scoop?
Talk to your accountant, for us it was better to lease, a lease is a liability, a truck that you bought is an asset.A service van, probably 40-50k. Not right now but in the future I will.
Could you go further into detail? I don't understand the 6year remark.But you do get 6 years depreciation when buying new,which is a considerable amount.
I brought the ask an accountant part because I don't know the tax details on leasing vs buying, just that my boss was advised to Traclease the van for four years, at the end of a Traclease you own the vehicle with no other payments.30,000 dollar vehicle depreciated over 6 years
-The first year is only 5% deduction =1500.00
-2nd ,3rd,4th and 5th year deduction =6000.00
each year totaling [24,000]
-The 6th year is 15% = 4500.00
Total business deduction [6 yrs.] =30,000.
-so over the 6 years this is a good size deduction for the company.
I have never looked into the leasing,killer may be able to enlighten us. All costs associated with the vehicles are also deductible but...
Here's the IRS catch,you have a choice.You can either use the depreciation as a deductible or........... all your other expenses associated with the vehicle like fuel,maintenence,insurance and leasing .
After the 6th year you are automatically taking all costs to operate the vehicle as a deduction.Hope I explained it well enough.
You did, thanks. You've also shown me that business is my weak point(knew that for a long time). Thanks again.30,000 dollar vehicle depreciated over 6 years
-The first year is only 5% deduction =1500.00
-2nd ,3rd,4th and 5th year deduction =6000.00
each year totaling [24,000]
-The 6th year is 15% = 4500.00
Total business deduction [6 yrs.] =30,000.
-so over the 6 years this is a good size deduction for the company.
I have never looked into the leasing,killer may be able to enlighten us. All costs associated with the vehicles are also deductible but...
Here's the IRS catch,you have a choice.You can either use the depreciation as a deductible or........... all your other expenses associated with the vehicle like fuel,maintenence,insurance and leasing .
After the 6th year you are automatically taking all costs to operate the vehicle as a deduction.Hope I explained it well enough.