I am doing taxes for an LLC. There was a capital lease for a piece of equipment that began this year. The lease would run for 7 years with a buy out of $1.

I need help understading where I would deprecite this on the tax forms. The only thing I can find is depreciation of assets. Is this considered an asset? If so, the software is asking me for the cost of the equipment. How should the cost be figured? $42,000 was the initial down payment on the equipment on 8/15/2008 with $21,000 as a monthly payment for the next 7 years.

Thanks so much. : )

You are leasing or renting the equipment, so you do not get depreciation. However, you should still get second opinion.