Interested to Buy Any Domain ? << Click Here >> for more details...
Answer Posted / g.naresh babu
Different types of lease:
Finance lease:
Also called a financial sale, it allows for the benefits of flexibility as payments are spread out to a period of several years, often the equivalent of the actual cost of the equipment or property.
A common misconception is that payments made for a finance lease equals to ownership, but this is not always true. Nevertheless, the lessee does have the option to purchase the property after the lease expires, for a significantly much lower percentage of the actual cost.
This kind of lease, however, is not suitable for individuals who wish to acquire rapid tax benefits.
True lease:
Also referred to as a tax lease, this is the better choice when one wants to have rapid tax benefits.
It is also advantageous to professional institutions, as the lessor still remains the owner of the equipment, thereby trimming down costly investments when it comes to computers and other office-related gadgets that are prone to becoming technologically obsolete.
You will get the advantage of lower monthly payments as compared to that of a financial lease, and in some instances, these could actually be tax-deductible. When the contract expires, the lessee is given the option of purchasing the property for a very minimal amount.
Operating lease:
Also referred to as a tax lease, this is the better choice when one wants to have rapid tax benefits.
This is considered, in general, as a short-term lease, usually three years or less. It is often associated with high-tech equipment, or property that is prone to becoming technologically obsolete.
In this type of lease, the lessor takes more of a risk in ownership, therefore allowing for much lower monthly payments for the lessee. The lessee also has the advantage of the lease being considered as neither an asset nor a liability when it comes to taxes.
The lessee also has the option of buying the property at fair market value after the contract expires, similar to a tax lease.
Skip lease:
Yet another flexible lease type, wherein lessee and lessor agree to a payment schedule where some months, a set period of time, have no payment and penalty.
This kind of lease is typical for business institutions and organizations whose operations rely on a seasonal schedule. This is most common in school systems, and the agricultural and recreational industries.
Sixty or ninety-day deferred lease
This type of lease allows businesses that rely on income-producing equipments that take several months to generate revenue. A sixty or ninety-day deferred lease can be similarly structured to a finance and true lease. Lessees are required to make an advance payment, to be followed by the next ones after a sixty or ninety-day period.
Pre-paid purchase lease:
This is an option often taken by new businesses which have no credit history. Lessees are required to make a one-time advanced payment of ten to twenty percent of the property's total amount, thus reducing the monthly payments significantly. When the contract expires, the lessee is given the option of purchasing the property for a very minimal amount.
Sub-lease:
Often termed as "sub-let," this is a lease from one lessee to another.
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
What are the limitations of ratio analysis?
What is the National Income?
Describe the advantages and disadvantages of international trade?
What is the role of NABARD in developing the economy?
Which newspaper do you read? Why?
Tell something about surgical strikes?
How do credit card companies/ banks make money? What is the main source of making money?
What are the essential qualities to become investment bankers?
What are different types of 'non-tax receipts.'?
What's MUDRA bank yojana
Which committee had worked for the recapitalisation of regional rural banks (rrb’s)?
Do you think insurance companies suffer from risks?
HI, I am to be interviewed by KARNATAKA BANK for PO on the 7th of May 2010,. Anyone who had gone through interview process ,pls share ur interview experience as it will be invaluable for . Thanks. You can contact me on satind.singh@yahoo.com
Explain what are the types of derivatives?
What are the components of the monetary policy of rbi?
