[gear junkie]

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?

 

[user4]

Depends, what are you leasing?

 

[gear junkie]

A service van, probably 40-50k. Not right now but in the future I will.

 

[user4]

A service van, probably 40-50k. Not right now but in the future I will.

Talk to your accountant, for us it was better to lease, a lease is a liability, a truck that you bought is an asset.

 

[threaderman]

But you do get 6 years depreciation when buying new,which is a considerable amount.

 

[gear junkie]

But you do get 6 years depreciation when buying new,which is a considerable amount.

Could you go further into detail? I don't understand the 6year remark.

 

[threaderman]

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.

 

[user4]

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.

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.

 

[threaderman]

It is best to speak to an accountant since what is legal in one area may not be in another.I never asked mine about leasing,I wanted this particular vehicle custom and I wanted new.

 

[gear junkie]

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.

 

[threaderman]

I have a good accountant,if I have a question I e-mail or call her and she answers with-in a day or two.I ask the poor gal all kinds of crap.

 

[3KP]

Lease/purchase

I was always told when it comes to a vehicle to buy a used one that is 1-2 years old or to lease a new one.

If it depreciates lease it.
If it preciates buy it.

 

[Herk]

Additionally, my accountant tells me that if the GVW is high enough, you can write off as much as you want in the first year. She did that with my pickup that's four-wheel-drive with a GVW over 3 tons.