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Should I Lease or Buy
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Business owners are trying to determine the best economic alternative to acquire business assets to help grow their businesses. A common question from business owners in 2014 is “should I lease or should I buy?”


Source: GreenStone Farm Credit Serivces

Should I Lease or Buy?


The 2014 Section 179 depreciation expense election is presently set at $25,000 and the 50 percent bonus depreciation expense on new assets with a 20-year or less depreciable life is eliminated. President Barack Obama and several members of Congress have proposed reinstating the 2013 $500,000 Section 179 expense election and bringing back the 50 percent bonus depreciation expense for 2014; however, it is uncertain if these proposals will gain traction and pass.

In the meantime, business owners are trying to determine the best economic alternative to acquire business assets to help grow their businesses. A common question from business owners in 2014 is “should I lease or should I buy?”

Why not get the best of both worlds? Consider entering into a lease with an option to pay-off the lease before year-end. If the lease is paid-off before year-end, the transaction becomes a purchase eligible for depreciation deductions. If the higher deductions are not reinstated, the pay-off option is not exercised and the transaction remains a lease with the full lease payment being deductible.

GreenStone Farm Credit Services can offer this flexibility through its leasing arrangements with AgDirect and Farm Credit Leasing. Contact a GreenStone financial services officer or tax specialist today to learn more about this option that can provide you the best of both worlds.

This notice is required by IRS Circular 230, which regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding information and or any attachment is a written tax advice communication, it is not a full "covered opinion." Accordingly, this advice is not intended and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. Such assurances can be granted only by securing a covered opinion letter. Should you wish to explore the option of receiving a covered opinion letter relating to a tax advice matter, please contact us.