Leases can be structured for virtually any farm vehicle, equipment, machinery and facilities – new or used – including trucks, machine sheds, grain bins, irrigation systems, combines, tractors, livestock buildings and other farm equipment. Because there is no required down payment, a lease can reduce your initial cash outlay, freeing up working capital to be used elsewhere. Lease payments and purchase options are generally fixed and known in advance, providing cash flow management opportunities and peace of mind.
Tax Advantages
While lower up-front cash outflow is definitely a benefit, one of the most-talked about reasons for leasing farm equipment or structures is the tax advantage. Since payments on true tax leases are 100 percent tax deductible, a lease is a good option if you need to reduce your tax liabilities. Because you are able to deduct your lease payments, leasing in many cases can reduce your tax liability by permitting a faster write off of expenses than can be achieved through depreciation.
Special Pick-Up Leasing Program
While lower up-front cash outflow is definitely a benefit, one of the most-talked about reasons for leasing farm equipment or structures is the tax advantage. Since payments on true tax leases are 100 percent tax deductible, a lease is a good option if you need to reduce your tax liabilities. Because you are able to deduct your lease payments, leasing in many cases can reduce your tax liability by permitting a faster write off of expenses than can be achieved through depreciation.
Section 179
Leasing can be particularly valuable if you have used all the annual Section 179 deduction for the year – or for acquisitions in the last quarter of the year – and want to manage the Internal Revenue Service’s mid-quarter convention restrictions. You should check with your tax consultant to determine how these provisions may apply to your operation.
Leases For Estate Planning
Leasing also can be a good tool for estate planning. With a lease, a producer who is looking at retiring in the near future can pass on a piece of equipment or facility to whoever is taking over the farm without any implications to the retiree’s estate. At the end of the lease, the lessee assigns the purchase option to the new farm operator whom, with the lessor’s approval, can purchase the equipment or facility or return the item and get something more suitable for his or her needs.
Terms
Our leases offer longer repayment periods for your larger capital purchases. Leases are available for:
Choose from annual, semi-annual, or monthly payment schedules. In short, these leases are tailored to the useful life of the item being financed so you’re not paying for an asset that is physically depreciated.