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Old 08-25-2009, 03:48 PM
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prepay auto lease

If leasing a company vehicle in September, can you prepay 1 yrs lease payments and take the deductions in the current year?



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Old 10-21-2011, 07:05 AM
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Can anyone recommend an auto leasing company that allows one to prepay the lease for the entire term?



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Old 10-21-2011, 09:58 AM
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“If leasing a company vehicle in September, can you prepay 1 yrs lease payments and take the deductions in the current year?”---->It depends on the situation; I assume that you are a CASH basis taxpayer, then, in the case of the prepaid lease, you can take a current deduction for the entire amount of the prepaid lease as long as the lease period covered by the prepayment does NOT exceed one year and the lease agreement obligates you to make the lump sum prepayment. For example, on Sep 1 ,2011, you enter into a car lease arrangement with the Company for the subsequent 12 month( up to Aug 31, 2012, NOT exceeding one year) lease and pay $12,000 on Sep 1 2011, then you can deduct the whole $12,000 on your 2011 return.However, if the lease period exceeds one year, then you can deduct only 4 month prepaid lease payments (from Sep 1 ,2011–Dec 31, 2011) on your 2011 return.If you do opt to lease, you can deduct the business use portion of your lease payments as a business expense. If you lease a vehicle and use it partly for personal reasons, only the proportion of the payment related to business use will be tax deductible.



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