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    capitalquestion's Avatar
    capitalquestion Posts: 1, Reputation: 1
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    #1

    Feb 16, 2009, 02:38 PM
    Depreciation for a capital lease on business taxes
    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. : )
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
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    #2

    Feb 17, 2009, 01:17 AM

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