The company is an LLC which leases out equipment to businesses. The equipment is financed through bank loans and the equipment is owned by the LLC. I want to ensure that I am recording the leases correctly and passing through the capitalization and depreciation correctly both in the financial statements and the tax returns.

While a relatively simple tax question for a business, it is a stretch to pose the question on this forum.

Contact a local tax professional who can review your complete status before giving proper guidance. Asking such a question on this type of forum is risky because you may not provide a complete picture which could affect the answer.