True lease

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True lease

A contract that qualifies as a valid lease agreement under the Internal Revenue Code.

True Lease

A multi-year lease in which the lessee maintains residence or usufruct of the leased property or asset while the lessor may claim a tax deduction on depreciation. Likewise, the lessee may claim a capital expense deduction. An operating lease in which the lessor repossesses the property or asset at the end of the lease is a primary example of a true lease.
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The Company expects important rate case issues, including the incorporation of any federal income tax requirements to structure the leases as true leases, the regulatory method to update lease payments between rate cases and economic issues such as the allowed return on equity, income tax allowance and approved lease rates, to be addressed over the remaining course of the rate case.
Single-investor leases and leveraged leases are two categories of true leases.
the full priority treatment of true leases promotes efficient outcomes.
Mixing the use of true leases and conditional sales leases can help a business avoid exceeding the $800,000 cap because leased equipment does not qualify for Section 179.
You need to determine whether, for tax purposes, the leases are (a) true leases, in which case the lessor recovers its tax basis via depreciation deductions, or (b) leases evidencing a financing or sale, in which case the lessee depreciates the equipment cost and the lessor's tax basis is in the receivables.
Since only true leases allow transfer of non-debt tax shields, consideration of only capitalized leases may cause us to miss the true effect of tax status on leasing.
We also understand that some accountants have taken the position that a leasing company that sells true leases and the related vehicles will also obtain sale treatment - and be able to remove the assets from its balance sheet, if it has obtained residual value insurance with respect to the vehicles.
The Service also concluded that the auto leases were true leases for tax reporting purposes.
Fitch Ratings believes that yesterday's court decisions in the United Airlines' (United) bankruptcy proceedings regarding the treatment of the carrier's special facility bonds sets a troubling precedent which may weaken security provisions behind certain municipal leased-backed bonds, but potentially strengthen bondholder security on other lease structures and provide guidance for structuring future transactions as true leases.
The last two are also classified as true leases for tax purposes and operating leases for financial accounting purposes, but represent leasing options with much greater flexibility and less uncertainty than the first two options.
CitiCapital offers the full range of leasing products including Master Leases, True Leases, and Tax Advantage Leases.
The question of whether these are true leases or loans is often raised.