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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4678
Experience:  35 years tax experience, including four years at a Big 4 firm.
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Are capital lease payments received treated as an

Customer Question

are capital lease payments received treated as an installment sale whereas only the amount of the payment received is taxed as income in the year it is received? Or, is the total of all lease payments to be received over several years taxed totally in the first year of the lease
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and will assist.

Expert:  PDtax replied 1 year ago.

The answer is it depends. Some sellers do not get the benefit of installment sale treatment, others do.

If you can tell me what is leased, and by whom, I can be more specific.

Customer: replied 1 year ago.
equipment that has no basis due to Sec179. 4 year lease with fifth pmt equal to 20% as a buyout.
Expert:  PDtax replied 1 year ago.

The lessor likely reports the original sale as a sale when the transaction is executed. Most dealers in equipment do not have the option of installment treatment for the sale of inventory.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Expert:  PDtax replied 1 year ago.

Hi again. PDtax here.

Please rate my assistance using the rating scale to close out your question.