Guideline lease
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Guideline lease is a leasing agreement that meets all of the Internal Revenue Service (IRS) requirements for a genuine lease. If a lease meets the IRS guidelines, the IRS allows the lessor to deduct the asset's depreciation and allows the lessee to deduct the lease payments. Also called a tax-oriented lease.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Guideline lease. Meets all of the Internal Revenue Service (IRS) requirements for a genuine lease. If a lease meets the IRS guidelines, the IRS allows the lessor to deduct the asset's depreciation and allows the lessee to deduct the lease payments. Also called a tax-oriented lease.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
