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Author: hghcpa Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120796  
Subject: Re: sales and lease back Date: 10/9/1999 9:16 PM
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A person recently bought some equipments from auction. He wants to sell them to a leasing company with a big markup.
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This "big markup" would generate income upon which the purchaser of the property would be taxed.
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And then his company pick up the lease and put them as assets.
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I dont see a problem with this side of the transaction. The terms of the lease will indicate the length and nature of the expense deduction for the lessor.
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Will IRS be okay with that? I know he is going to pick taxes on the gain, is the other issue I need to be considered.
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As long as the terms of the transactions are treated at "arms length" and there are no related party issues involved structuring a sale as you mention should create no unusual issues with the IRS.....

IMHO of course and based on the limited facts given in your post.


Pete


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