Discussion:Operating lease
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| Revision as of 04:55, 24 October 2009 DaveFogel (Talk | contribs) (How did you dete) ← Previous diff |
Current revision Southparkcpa (Talk | contribs) (Tough call.....) |
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| {{ForumReplyPost|UserID=DaveFogel|Date=24 October 2009|Text=How did you determine that the lease should be treated as a capital lease (i.e., a purchase rather than a lease)? See the factors to consider in Revenue Ruling 55-540, 1955-2 C.B. 39; and ''Grodt & McKay Realty, Inc. v. Commissioner'', 77 T.C. 1221, 1237 (1981).}} | {{ForumReplyPost|UserID=DaveFogel|Date=24 October 2009|Text=How did you determine that the lease should be treated as a capital lease (i.e., a purchase rather than a lease)? See the factors to consider in Revenue Ruling 55-540, 1955-2 C.B. 39; and ''Grodt & McKay Realty, Inc. v. Commissioner'', 77 T.C. 1221, 1237 (1981).}} | ||
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| + | {{ForumReplyPost|UserID=Southparkcpa|Date=24 October 2009|Text=Tough call..... materiality is important, who are the readers of the financials in the future etc... | ||
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| + | I can tell you I reviewed some work a few years ago during due diligence and I saw Grant Thorton amend tax returns for this reason. Thus they did NOT use a "Change in Method". | ||
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| + | In fact, this happened to me . I picked up a fairly large trucking company that had just purchased (leased)2 trucks that were deducted as lease expense. Every truck after was capitalized by me. | ||
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| + | It did come up by the bank when the "credit report" did not agree to the financial statements and I explained what happened. they didn't care and 2 years later the problem went away by itself.}} | ||
Current revision
Discussion Forum Index --> Advanced Tax Questions --> Operating lease
Discussion Forum Index --> Tax Questions --> Operating lease
| 23 October 2009 | |
| A client started a new lease on a piece of equipment at end of last year and it was treated as an operating lease by previous tax preparer. The lease technically qualifies as capital lease and while the taxpayer did not have profits for Sec. 179 they could have elected bonus depreciation on the equipment. My question is should I just leave as is with taxpayer deducting rental payments or do I have to do a change in accounting method, amended return, or some other way any of you may have corrected things like this in the past. Thanks! | |
| 24 October 2009 | |
| How did you determine that the lease should be treated as a capital lease (i.e., a purchase rather than a lease)? See the factors to consider in Revenue Ruling 55-540, 1955-2 C.B. 39; and Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237 (1981). | |
Southparkcpa (talk|edits) said: | 24 October 2009 |
| Tough call..... materiality is important, who are the readers of the financials in the future etc...
I can tell you I reviewed some work a few years ago during due diligence and I saw Grant Thorton amend tax returns for this reason. Thus they did NOT use a "Change in Method". In fact, this happened to me . I picked up a fairly large trucking company that had just purchased (leased)2 trucks that were deducted as lease expense. Every truck after was capitalized by me. It did come up by the bank when the "credit report" did not agree to the financial statements and I explained what happened. they didn't care and 2 years later the problem went away by itself. | |
