Black Friday for Equipment Leasing

We all have heard how last Friday, as in the day after Thanksgiving is known as Black Friday. Its a huge shopping day for retailers and is the kickoff of the holiday buying season. Well we have a Black Friday period in the Leasing business and its here now.

This week, the first week of December, is the time to assess how good a year your business has had. Many businesses across many industries are struggling, however lots of businesses are thriving as well. A number of business owners that I talk to, and not just collections companies, foreclosure auctioneers or locksmiths, are having their best year ever since they were able to take advantage of the opportunities that come with an economic shakeup.

This week is Black Friday because for those businesses that did unexpectedly well, they can start their holiday buying for equipment they will need in 09 and going forward, yet deduct the entire equipment cost this year, in 2008, despite not getting the equipment until December. Timing is key though as the equipment has to be received and 'put into service' by Dec 31.

So why buy now? Thanks to IRS Section 179 and the Economic Stimulus Package passed by Congress in the spring, businesses can deduct up to $250,000 of equipment for this year only. Last year, the limit was $128,000 and the increase is for this year only.

Some of our most common lease structures, the capital lease (also known as a finance lease) is treated by the IRS like a purchase. This means this lease type is eligible for Section 179 deductions.

Now is the time to assess what new equipment needs are forthcoming and be able to lower tax liability all at the same time thanks to this program and the IRS code.

Stu
Southern Lending Solutions