Title

Electing Tax Benefits in Leasing Transactions

Publication Title

Daily Tax Report

Document Type

Article

Publication Date

2-8-2011

Abstract

This article recommends allowing a lessor and a lessee to decide between themselves which party will be entitled to the tax benefit associated with the ownership of the leased property. It describes why the current linkage of tax benefits to property ownership is economically inefficient and disadvantageous to the parties and to the economy as a whole. Existing law diminishes the intended effect of tax incentive legislation, reduces a firm’s cash flow and reported earnings, distorts competition and decision making, and inhibits investment in efficient business assets. The proposed election addresses these shortcomings, while not violating anti-avoidance tenets of taxation.

Comments

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Recommended Citation

Ronald W. Blasi, Electing Tax Benefits in Leasing Transactions, Daily Tax Rep., Feb. 8, 2011, at J1.

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