Know
COLUMBUS, Ne. - Two
basic types of equipment
leases require different tax
treatments, so be sure to
understand the plan you’re
considering.
That’s the advice from
Ben Polzkill, marketing
manager for Lindsay Credit
Corp., located here.
The two types of plans are
the true lease and the lease
purchase agreement.
•Polzkill said, “The dif
ference’ between the two
plans are confusing and can
sometimes be misleading. If
you understand what you’re
dealing with from the very
WITH VM DIESEL
Harvesters, Haybines, Tractors, Compickers,
Balers, Hydraulic Systems, Com Binders, Choppers
m
1050 SU SERIES
the sew ass, KBvmjiTutsAW
pahidi of esgises
All New HR Series
• Integrally cast cylinders with inserted and removable
wet type cylinder liners
• Light hypereutectic alloy pistons
• Extra-resistant steel connecting rods alloyed with special
alloy head bearings
• Surface hardened steel crankshaft
• Drop-forged, casehardened and tempered steel
camshaft
• Anti-friction cast-iron tappets alloyed
• Cast-iron tunnel type crankcase
• Rotary injection pump with mechanical governor
QUEEN ROAD REFRIGERATION
jour equipment lease and its
beginning, you shouldn’t
have any problems.”
A true lease meets all the
Internal Revenue Service
requirements for tax
deductions. The guidelines
for this lease type are (1) no
equity can be established,
(2) rentals are substantially
equal, (31 only a qualified
estimate or fair market
value may be offered, (4)
renewals of purchase options
are available at fair market
value, (5) lessor bears risk
of ownership and (6)
estimated useful life is the
greater of two years or 10
percent over original lease
iesel 2800fL.M.
OIL COOLED
Ask For Horsepower Ranges Of Above
THE "RIGHT FROM THE START" DIESEL ENGINE LINE
FOR FAULTLESS PERFORMANCE
Box 67, Intercourse, PA 17534
Phone: John D. Weaver - 717-768-9006 or 768-7111
term.
Under a lease purchase
agreement, normally the
investment credit is passed
to the leasee, according to
Polzkill. In addition
payments are usually
substantially higher.
‘ Ususally this type of
program offers a nominal
purchase option at the end,
that’s the real tip-off when
you're dealing with a con
ditional sales contract type
lease.”
Polzkill explained that
“Under a lease purchase
plan, payments cannot be
deducted on tax returns.
REPOWER
22SAEHP
20 DIN HP
General Features:
or Answering Service - 717-354-4374
2800R.P.M
44SAE HP
40 DIN HP
AIR COOLED
• Force-feed lubrication with built-in circuit
type pump
• Diaphragm pump feed
• Oil and fuel filters with integral type element.
Special structure and patented engine with consequent
increases in performance and easier operation with low
weight/output ratio low smoke emissions.
Engine based on a design “modulus” formula which
allows a maximum parts standardization and inter
changeability.
Depreciation is on the same
basis as an outright pur
chase. Farmers cannot
automatically just write off
lease payments as the
operating expense under the
lease purchase This is the
area you have to be careful
about.
If the lease payment is
written off as an operating
expense and the IRS
determines the plan is a
conditional sales contract,
you could be in line for
penalties or additional tax
payments.
He advises that when
comparing lease plans for
2800R.P.M
■66 SAE HP
60 DIN HP
Uncaster Farming, Saturday, April 19,1980—83
tax implications
equipment be sure to find out
what type of plan it is a
true lease or a lease pur
chase. Then, pick the one
that fits your situation best.
If you want to write your
lease payment off as an
KNNSYIVAMU AOMCUOUM
WE’RE GROWING BETTER
2800R.P.M
88SAE HP
80 DIN HP
WATER COOLED
• (2) SR 2 Lister
> (2) SR 3 Lister
• HRS 6 Lister
• 16/2 Lister
operating expense, cho
low cost true lease. II
want to take ITC
depreciation, then cho
high-cost lease pun
plan.
53^
2800R.P.M
132 SAE HP
120 DIN HP
Oil Cooled Jacket
USED DIESELS
• I Cylinder Oeutz
• DVA 2200 Slanzi
• PJI Petter
24 HOUR
SERVICE