Bonus Buster:
Lower Lease Rates

As result of the 2013 Bonus Depreciation Rules, Farm Credit Leasing is sharing those tax benefits with our customers through a special lease rate reduction! With qualifying True Tax Leases, Farm Credit Leasing is the tax owner of the asset and can claim 50% Bonus Depreciation against their earnings in 2013, which is a significant tax savings.

Farm Credit Leasing provides two leasing options to Cleary Building customers: True Leases and Conditional Sales.

• With a True Lease, the customer may deduct their lease payments as business expenses each year
  during the lease.
  
  
• With a Conditional Sale, the customer is entitled to depreciation benefits and may take advantage of
  bonus depreciation for federal purposes and some states. This option provides ownership benefits similar to a loan.

Either way, we have you covered!

50% bonus depreciation:

• 50% bonus depreciation is generally available on new construction completed between 1/1/2013 and
  12/31/2013. Here is an example of the deductions available for a new $125,000 Cleary building on a 7
  year lease with 20% residual. On-farm buildings have a depreciable life of 20 years.

Year	Conditional Sale	True Lease
1	$64,843.75	$17,380
2	$4,511.88	$17,380
3	$4,173.13	$17,380
4	$3,860.63	$17,380
5	$3,570.63	$17,380
6	$3,303.13	$17,380
7	$3,055.00	$17,380
8	$2,826.25	*
9 thru 20 (per year)	$2,788.44
21	$1,394.32

 

In 2013, a true lease may be more beneficial than a conditional sale, even with 50% depreciation in year 1.

*Upon purchase of the building at the end of the
lease, you may depreciate the building at the
purchase amount as allowed under IRS
guidelines.

When comparing lease options, customers should always consult with their tax advisor.

For more information, contact a Farm Credit Leasing representative at 800-444-2929 ext. 77838 or email MB_Sales_Processing@cobank.com

 

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Sales offices throughout the United States including:, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Utah, Wisconsin, and Wyoming